SIP or Systematic Investment Plan is a mode of investing in mutual funds where you can invest a fixed amount periodically e.g. monthly or quarterly. SIPs are effective tools for disciplined investment, invest even with a very small amount and benefit from rupee cost averaging. When you invest via SIPs you invest at all market levels. When the NAV is high you get less units and when markets fall you get a higher number of units. Overall the average cost of holding works in investors favour over a long period. SIPs foster a habit of saving and save time and effort by automating the investment decision.