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SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds, typically on a monthly basis. Instead of timing the market with a lump sum, SIP lets you invest small amounts consistently. Each month, units of the mutual fund are purchased at the prevailing NAV (Net Asset Value). Over time, this approach benefits from rupee cost averaging — you buy more units when prices are low and fewer when prices are high — and the power of compounding. SIPs can be started with as little as ₹500 per month in India.

A good SIP amount depends on your income, financial goals, and monthly expenses. Financial advisors recommend investing 20-30% of your monthly income through SIPs. Here are some general guidelines:

• Beginners: Start with ₹5,000–₹10,000 per month
• Mid-career professionals: ₹15,000–₹30,000 per month
• High earners: ₹50,000+ per month across multiple funds

Use a step-up SIP strategy: increase your SIP by 10% every year as your income grows. Even a modest ₹10,000/month SIP at 12% returns grows to over ₹23 lakhs in 10 years and ₹1.18 crore in 20 years.

Both SIP and lump sum have their advantages depending on market conditions and your financial situation:

• SIP advantages: Rupee cost averaging reduces risk, disciplined investing habit, ideal for salaried individuals, no need to time the market
• Lump sum advantages: Can yield higher returns if invested during market lows, better for windfall gains or bonuses

For most Indian investors, SIP is the recommended approach for long-term wealth creation (5+ years). Historically, equity mutual fund SIPs in India have delivered 12-15% annualized returns over 10+ year periods. If you have a large sum available, consider investing part as lump sum and the rest via SIP to balance risk and returns.