SIP is like a regular investment of a fixed amount, which is auto-debited from the investor’s bank account at a pre-defined date chosen by the investor.
The amount is then transferred to the mutual fund company, which allocates a certain number of units of the fund to the investor, at their Net Asset Value (NAV) for the day.
The amount invested remains the same at every interval. However, the number of units bought change, as NAV changes every day.
The investor gets more units when the prices are low and less units when prices are high.
