This is a simple strategy for accumulating wealth over a period by investing regularly at a fixed interval of time in mutual fund schemes, this is similar to the concept of recurring deposits scheme, but this being in equity comes with a relatively higher risk and higher return than the recurring deposits.
What is Systematic Investment Plan?
An investor commits to invest a specific amount for a continuous period at regular intervals, this ensures that he gets more units when prices are low and fewer units when prices are high. This works on the principle of rupee cost averaging when invested at different levels and automatically participate in the swings of the market.

Advantages of Systematic Investment Plan

Compounding: To avail the benefit of power of compounding one must start early and invest regularly. A delayed investment will lead to greater financial burden to meet the required goals. At early-stage lower investment is required where as more investment is needed at a later stage to accumulate the same planned corpus.
Rupee-Cost averaging: It means averaging the cost price of your investments. SIP helps in averaging the cost as equal amount is invested regularly every month at different NAVs. SIP works well in a volatile market as in the months where markets are down you get a greater number of units as the NAV is down and when the markets are up you get a smaller number of units.
Convenience: It is very easy to start an SIP, you need to plan your saving wisely and keep aside some amount of money every month for investing in funds. It is always better to start at an early age with small amount and increase the same from time to time. If you have not invested yet, start now without any delay, waiting for the right time to invest can lead to missed opportunity. One can take the benefit of SIP only, when you choose the right schemes and be faithful and continue to stick to it, without any deviations.