SIP and mutual funds are related concepts, but they are not the same thing.
Mutual funds are investments that collect money from many investors and invest in a portfolio of stocks, bonds, or other securities. Investors buy units of the mutual fund, and the value of those units increases or decreases based on the performance of the underlying investments.
SIP, on the other hand, is a method of investing in mutual funds. It allows investors to invest a fixed amount of money at regular intervals, such as monthly or quarterly. The fixed amount is deducted from the investor’s bank account and invested in the mutual fund.
So, the main difference between SIP and mutual funds is that mutual funds are the investment vehicle, while SIP is the method of investing in mutual funds.
SIP is a popular way of investing in mutual funds because it allows investors to invest small amounts of money regularly and take advantage of rupee cost averaging. Mutual funds, on the other hand, offer investors the opportunity to diversify their portfolios and benefit from the expertise of professional fund managers.
In summary, SIP is a way of investing in mutual funds, while mutual funds are investment vehicles that pool money from many investors and invest in a portfolio of securities.