Understanding Stock SIP (Systematic Investment Plan)

6 mins read
by Angel One

Wealth creation via investing takes discipline and time. It requires investors to develop a healthy savings habit and a systematic approach to invest regularly. SIP or Systematic Investment Plan is enjoying a growing acceptance among new investors, who don’t want to go to any length to investigate the market every time they invest but want to enjoy the benefits of investing in the equity. Stock (Equity) SIP is a specially designed investment tool that allows investors to invest in Stocks, Equity, ETF, etc. Wondering if it’s any different from the traditional share market investment? The answer is yes and it offers certain advantages. How? Let’s discuss that in this article.

What is Stock SIP?

SIP stands for a Systematic Investment Plan. And Stock SIP stands for setting up a regular investment plan to invest in the equity market, as you do for mutual funds. The result is wealth-building over your investment horizon by averaging out market risk and compounding return. Like mutual funds, Stock SIPs allow you to put your funds in shares, index exchange-traded funds (ETFs), and gold exchange-traded funds in a regular manner. Instead of investing in lumpsum, you can spread your investment in regular installments at the desired frequency. You can invest a predetermined amount in Stock SIPs with the Angel One platform and you can also assign a Basket Name to the Stock SIP. A basket is a combination of up to 10 stocks with different weightage in a single Stock SIP.

Why is Stock SIP the right choice?

Below are the key characteristics and benefits that make Stock SIP a suitable investment option.

Helps in meeting financial goals 

Stock SIP is beneficial for people who want to achieve their financial goals by investing a small amount of money regularly. With this investment type, you can earn good returns over your investment period.

Inculcates discipline by regularizing investments

Stock SIPs are scheduled investments executed at regular intervals like daily, weekly or monthly basis; as per your preference. As your investment is already scheduled it keeps you disciplined towards investing and allows you to plan your finances better.

Starts with a small amount of money 

You don’t need a huge amount to build a diversified portfolio. Stock SIP helps invest in shares from different companies across sectors without digging a big hole in your pocket. With Angel One, you can start Stock SIP with a minimum amount and select scrips according to your financial goals.

Eases market monitoring 

The amount of money you are investing in Stock SIP is as per your desired frequency. As it is a disciplined investment and offers the benefit of rupee cost averaging, you don’t have to worry about monitoring the market on a daily basis.

Reduces risk with rupee cost averaging

One of the many advantages of a Stock SIP is rupee cost averaging. You need to understand how it helps in building your wealth and benefits you. Rupee cost averaging is a method of investing fixed installments in any scheme regularly, say monthly. Since the investment amount is fixed and consistent, more shares are credited to the Demat account when the market is low and less when the market is high. This process spreads out the risk over the investment period while the reward gets optimized.  It is a method to eliminate risk exposure due to sudden market movements and help your portfolio to grow over your investment horizon. Let’s understand it better with an example. Following is a Stock SIP investment chart for six months and the Stock SIP amount for a particular stock is Rs. 10,000.

S. No. Month Share Price No. Of Shares Amount Invested
1 January 100 100 10,000
2 February 100 100 10,000
3 March 95 105 9,975
4 April 100 100 10,000
5 May 110 90 9,900
6 June 120 83 9,960
Total 578 59,835
Average Price For The Shares 104.17

Rupee cost averaging is calculated on the basis of Share Price. See in the table how the number of shares purchased fluctuates with the fluctuation in the Share Price. You can reap the benefits of rupee cost averaging with Stock SIP.  Consider that the current price is Rs. 120 and you can see that the average price for you is Rs. 104.17. It means that investing in Stock SIPs averages out the price of the shares while earning you profit.

Facilitates SIP modification and addition of up to 10 scrips

Angel One allows you to modify your Stock SIP in the future at no cost. You can modify the Stock SIP amount and the period for which you want to invest; easily through Angel One platform. Also, you have an option to add up to 10 scrips as per your preferred weightage in a single SIP basket to build a diversified portfolio.

No exit load & no annual maintenance charges

Unlike mutual funds, when you invest in Stock SIP

  • You don’t have to pay any exit load while selling shares from your portfolio bought via Stock SIPs
  • You don’t have to pay annual maintenance charges also known as expense ratio when you invest in Stock SIP

Only brokerage and DP charges will be levied as per your brokerage plan.

How to set up a Stock SIP plan?

Angel One has automated the investing process offering you a DIY (Do-it-yourself) journey to invest in Stock SIP; easily and conveniently. Our app allows you to choose stocks, adjust investment amounts, select frequency, and set a SIP plan. Here’s how you can start Stock SIP:

  • Visit the ‘Trade’ >> ‘Stock SIP’ on our mobile app
  • Enter Basket Name, Amount, Frequency, and Period
  • Create basket, add your preferred stocks & click on ‘Place Order’

Note: The amount for Stock SIP will be debited from your ledger balance. If funds are not available, your order will not be executed.

Stock SIP in a nutshell

Stock SIP is a systematic process that lets you invest in the stock market with regular small installments. It is an approach to accumulate stocks in a phased manner, helping investors, who aren’t regularly connected to the market, to build wealth over their preferred investment span.

When is the right time to invest in Stock SIP?

As the proverb goes, ‘The right time to plant a tree was 20 years ago and the second-best time is now’. Similarly, there is no right time to start investing in it. You can start investing now without worrying about the market fluctuations.


Stock SIP has the potential to yield good returns and helps you to achieve your financial goals by investing regularly. It is a disciplined investment that lets you create a diversified portfolio. So, if you haven’t yet availed of these benefits of investing in Stock SIPs, you can do so today. Download the Angel One app and start investing.

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