What is SIP? A simple explanation
SIP stands for Systematic Investment Plan. It's a way to invest a small, fixed amount regularly in a mutual fund — instead of saving up a large sum first. Think of it like a recurring deposit, but in gold or equity.
Start a Daily Gold SIP — ₹21/daySIP = invest a fixed amount regularly, automatically
No need to time the market. No lump sum needed. The habit does the work — you just keep it running.
How does a SIP work?
Four simple steps — once it's set up, it runs automatically.
Step 1: Choose your fund and amount
You pick a mutual fund (gold, equity, silver, etc.) and decide how much to invest per instalment — e.g., ₹21/day, ₹500/month. You also choose the frequency: daily, weekly, or monthly.
Step 2: Auto-debit on each date
On each scheduled date, the SIP amount is automatically debited from your bank account and invested in the chosen mutual fund at the current NAV (Net Asset Value — the fund's price that day).
Step 3: Units accumulate over time
Each instalment buys more mutual fund units. When the price is high, you buy fewer units. When the price dips, you buy more. Over many instalments this averages out your purchase price — a property called rupee cost averaging.
Step 4: Redeem when needed
You can redeem your mutual fund units any time (for most funds — no lock-in). The current value of your units is paid into your bank account, typically within 2–3 working days.
Why SIP works — the key benefits
Rupee cost averaging
Because you invest a fixed amount regularly, you automatically buy more units when the price is low and fewer when it's high. Over time, your average purchase price smooths out — you don't need to "time the market."
Compounding over time
The returns you earn on your investment also earn returns. This compounding effect means that starting early — even with ₹21/day — can build a meaningful corpus over years. Time in the market matters more than amount at entry.
Builds financial discipline
Because the SIP deducts automatically, saving becomes non-negotiable. You spend what's left after saving — not the other way around. This habit shift is often the most valuable thing a SIP creates.
No lump sum needed
You don't need to save up before you start investing. A daily SIP of ₹21 is all you need to begin. The investment grows from small, consistent contributions — accessible to anyone with a bank account and ₹21 to spare each day.
Types of SIP in India
SIPs can invest in many types of mutual funds — not just equity.
| SIP Type | Underlying asset | Best for |
|---|---|---|
| Gold SIP | Gold mutual fund (tracks gold price) | Inflation hedge, conservative savers, goal-based saving |
| Silver SIP | Silver mutual fund (tracks silver price) | Diversification alongside gold |
| Equity SIP | Stock market (index funds, large-cap, mid-cap) | Long-term wealth creation (5–15+ years) |
| Debt SIP | Government bonds, corporate bonds | Stable, low-risk returns |
| Daily SIP | Any mutual fund — with daily frequency | Daily wage earners, people who find monthly saving difficult |
SIP — frequently asked questions
SIP (Systematic Investment Plan) is a method of investing in a mutual fund where you invest a fixed amount at regular intervals — daily, weekly, or monthly. Each instalment buys mutual fund units at the current NAV. Over time, returns accumulate through rupee cost averaging and compounding. SIPs can be started and stopped at any time, and there is generally no lock-in (except ELSS tax-saving funds).
A daily SIP invests a fixed amount every day instead of monthly. It allows you to start with very small amounts (₹21/day on Pyllar) and smooths out price fluctuations even further. Daily SIPs are especially useful for people who earn daily — gig workers, daily-wage earners, shopkeepers — where saving a monthly lump sum is harder than saving small amounts each day.
They serve different purposes. FDs give a fixed, guaranteed return (currently ~6%–7.5% in India) with very low risk. SIPs in equity or gold give market-linked returns that can be higher over the long term, but with more volatility — no return is guaranteed. Gold SIPs also act as an inflation hedge (gold has historically preserved purchasing power). For risk-averse first-time investors, FDs feel safer. For long-term wealth building with inflation protection, SIPs in gold or equity have historically outperformed FD returns.
Yes. You can pause or stop your SIP at any time from the app. Stopping the SIP does not affect the mutual fund units you've already accumulated — those remain invested. You can continue to hold them and redeem when convenient.
It depends on the platform and fund. Most traditional mutual funds require ₹100–₹500 per month minimum. On Pyllar, the minimum daily gold SIP is ₹21/day — one of the lowest available in India — making it accessible to daily savers and first-time investors who are starting with very small amounts.
A gold SIP invests your regular instalments in a gold mutual fund — so your returns track the gold price instead of the stock market. It works exactly like any other SIP: fixed amount, regular debit, units accumulate. The underlying asset is gold rather than equities. Gold SIPs are popular in India because gold is a familiar, trusted store of value and acts as a hedge against inflation and currency depreciation.
Start your first SIP today — ₹21/day
Daily gold SIP. 0% GST. SEBI-regulated. No lock-in. AMFI ARN 341847.
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