What It Means
A SIP (Systematic Investment Plan) is a fixed amount, auto-debited from your bank account at a regular interval (usually monthly), used to buy units of a mutual fund scheme. It's the standard way most Indian investors put money into equity mutual funds, rather than investing a lump sum all at once.
How It Works
Each SIP instalment buys units at that day's NAV, so you automatically buy more units when the market (and NAV) is down and fewer when it's up, a pattern often called rupee cost averaging. A SIP isn't a separate product from the fund itself; it's just a standing instruction, and you can pause, increase, decrease, or stop it anytime without affecting units you already hold.
Warning
Stopping a SIP because the market has fallen defeats the point of one. Rupee cost averaging works precisely because you keep buying through the dips, picking up more units at a lower NAV; stopping during a downturn is one of the most common SIP mistakes.