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Systematic Investment Plan (SIP): What It Is, How It Grows Your Money, and Whether It Beats a Lump Sum

By Fateen Tahseen Alam

Analyst

EDGE AMC Limited

Posted on: 24 Dec, 2023

Last Updated: 3 August, 2026

What is a Systematic Investment Plan?

A Systematic Investment Plan (SIP) is a method of investing a fixed amount of money at regular intervals — typically monthly — into a mutual fund, rather than investing a large amount all at once. 

In Bangladesh, most open-end mutual funds allow SIPs starting from as little as BDT 1,000 per month, which makes it accessible to salaried individuals far earlier in their careers than a lump-sum investment would allow.

What are the benefits of a SIP?

It removes timing risk, since a fixed monthly amount is invested regardless of market direction. It averages your purchase cost — buying more units when prices fall, fewer when they rise. It builds a habit rather than requiring a decision every month. It makes compounding accessible without needing a large starting sum. And it matches how most people are actually paid: monthly.

How much can a monthly SIP actually grow to?

The tables below assume monthly investing with monthly compounding, at two illustrative annual return assumptions. These are assumed rates for illustration only — not a guarantee of any EDGE AMC fund's actual return.

To view and compare the actual performance of the EDGE AMC mutual funds, kindly click here. 

What if you increase your SIP over time?

The tables above assume a flat SIP amount for the entire tenure. In practice, most people's income doesn't stay flat but grows with annual increments, bonuses, and promotions. And there's no rule saying your SIP has to lag behind it.

A Step-Up SIP automatically increases your monthly instalment by a fixed percentage or amount at set intervals, usually once a year. Instead of investing BDT 10,000 a month for 15 years straight, you might start at BDT 10,000 and let it rise by 10% annually, so later years see meaningfully larger installments, without you having to manually revise the amount each time.

You can model this for your own numbers using our Step-Up SIP Calculator.

SIP vs. lump sum: which one actually wins?

This is the comparison most articles oversimplify. The honest answer: it depends entirely on the path the market takes.

In a steadily rising market, a lump sum invested immediately tends to outperform the same amount drip-fed via SIP — because it has more time in the market compounding from day one. In a volatile market that dips before recovering, a SIP tends to outperform, because the dip lets it buy extra units cheaply that are worth more once the price recovers.

If you already hold a lump sum and believe markets will rise steadily, investing it immediately is mathematically likely to outperform spreading it out. If you're investing money you don't yet have — future income — a SIP isn't really competing with a lump sum at all; it's the realistic option, with the added benefit of smoothing volatility along the way.

To understand SIPs in further detail, please click here. 

Other factors worth knowing

Returns are never guaranteed. Fund selection still matters — a SIP into a poorly managed fund still delivers poor results. Longer horizons forgive more. Starting early outweighs starting big, because of how compounding works. And tax and cost considerations apply, and are worth understanding before committing.

Frequently Asked Questions

Q: What is the minimum amount to start a SIP in Bangladesh?

A: EDGE mutual funds start from as low as BDT1,000 per month. 

Q: Can I stop or change my SIP amount later?

A: Yes. Most SIPs can be paused, increased, decreased, or cancelled without penalty. You can also invest lumpsum along your SIP. 

Q: Does a SIP guarantee positive returns?

A: No. A SIP is a disciplined method of investing, not a return guarantee.

EDGE AMC offers SIPs starting from BDT 1,000 per month across its mutual funds, with auto-debit set up directly from your bank account.

Links

• Mutual Fund overview page
  
• EDGE Bangladesh Mutual Fund (EDGEBDMF)
  
• Fund Selector tool  
  
• Investor portal (start a SIP)  
  
• Guide on mutual fund investing
• SIP Calculator
• Lumspsum Calculator
• Step-Up SIP Calculator

Disclaimer: Investments are subjected to market risk. Past performance is not an indicator of future performance. This article is general information and does not constitute investment, legal, or tax advice for any specific fund. Trustee boards should obtain independent professional advice regarding their own circumstances and statutory obligations.