Video narration
When your monthly mobile recharge goes through, you know it's a scheduled payment-but what does a monthly SIP actually buy? With a SIP, you choose an amount to invest regularly in a mutual fund, a collection of investments bundled together. Each payment buys you units, which are small portions of that fund. The number you get depends on the NAV, the fund's value per unit, that applies to your installment. If the per-unit value is lower, the same payment buys more units; if it's higher, it buys fewer. Over time, your payments add units to your holding. But here's the shift: a SIP doesn't make money grow by itself. It keeps buying units, not guaranteed growth. So what did your scheduled payment buy? Units in your chosen mutual fund at the applicable NAV. Their value can rise or fall, so returns aren't guaranteed.