Investment
SIP
A Systematic Investment Plan invests a fixed amount in a scheme at regular intervals.
What it means in practice
SIPs average your purchase cost across market levels and remove the need to time entries. Returns on a SIP should be measured with XIRR, since each instalment stays invested for a different length of time.
Related terms
XIRR
Extended Internal Rate of Return calculates returns when money is invested or withdrawn at multiple points in time.
SWP
A Systematic Withdrawal Plan redeems a fixed amount from a scheme at regular intervals.
Step-Up SIP
A SIP where the instalment increases by a fixed percentage or amount every year.