In Nepal, many people want to start investing but do not know where to begin. The stock market feels complex, bank interest rates are falling, and keeping savings idle does not help your money grow. In this situation, a Systematic Investment Plan—popularly known as SIP—has become one of the easiest ways for ordinary people to start investing with very small amounts.
SIP simply means investing a fixed amount of money regularly. It could be every month, every three months, or even every six months. You do not need a large amount to begin. In Nepal, most SIPs allow entry with just Rs. 1,000. That is why it is becoming popular among students, jobholders, and anyone trying to build a savings habit.
How SIP Works in Nepal
SIP is available only through open-end mutual funds. These funds are run by professional fund managers who invest the collected money in shares, bonds, and other financial instruments. Unlike closed-end mutual funds that trade on NEPSE, open-end funds can be bought or sold directly through the fund manager or their partner banks.
When you put money into SIP, the fund issues units to you. Each unit has a base price of Rs. 10, but the actual value changes depending on the market. The fund manager uses your SIP contribution to buy various securities. As the value of those investments increases, the value of your mutual fund units (NAV) also rises.
Because SIP spreads investment over many months, it naturally reduces the risk of entering the market at the wrong time. You buy units when the market is up, but you also buy more units when the market is down—this helps your long-term returns.
SIP Schemes Available in Nepal
Nepal currently has nine open-end mutual fund schemes offering SIP options. These include:
NIBL Sahabhagita Fund NIC Asia Dynamic Debt Fund Siddhartha Systematic Investment Scheme NMB Saral Bachat Fund – E Shubha Laxmi Kosh Nabil Flexi Cap Fund Kumari Sunaulo Lagani Yojana Sanima Flexi Fund Prabhu Systematic Investment Scheme Citizens Sadabahar Yojana NI 31 NIC ASIA Equity Linked Investment Scheme
Anyone can choose any of these schemes based on their preference. Once the SIP is set, the investment continues automatically as long as you keep paying the chosen amount.
What Happens to the Money You Invest?
Every SIP contribution is turned into mutual fund units. Those units represent your share in the fund’s total investment basket. As the fund invests in shares, bonds, and other securities, the value of that basket grows or falls depending on the market. When the value of the fund increases, your units also become more valuable.
The NAV (Net Asset Value) of the fund keeps changing. When you eventually sell your units, you receive money equal to the NAV at that time. Some funds even distribute cash dividends, which you can either withdraw or reinvest to increase your number of units.
What Returns Have SIP Investors Received?
Open-end mutual funds are new in Nepal, but they have shown encouraging results. The first open-end mutual fund, NIBL Sahabhagita Fund, has been offering dividends since its launch. In its first four years, the fund distributed:
8.25%
50%
7.2%
4%
The average comes to around 17% per year, although returns vary based on market conditions. Other funds have different results, but overall, SIP returns tend to rise when the share market performs well. During strong years like 2078, when NEPSE reached a historic high, SIP investors enjoyed attractive returns. In weaker years, returns naturally fall.
This shows that SIP works best for long-term investors who continue investing even when the market is down.
Why SIP Can Be a Good Option for Nepali Investors
SIP has become popular because it offers several practical advantages:
You can start with a small amount.
You don’t need deep knowledge of the stock market.
Professionals manage your money.
Your investment risk spreads over time.
It builds a disciplined savings habit.
Your money grows through compounding.
At a time when bank interest rates are declining and inflation is rising, SIP helps ordinary investors gradually build wealth.
How to Start SIP in Nepal
Starting SIP is simple. After choosing a fund, you must fill out a SIP form. This includes the amount you want to invest, the payment frequency, the duration, and your personal details. You can pay through cheque or online methods, including mobile banking. Every time you pay, new units are added to your account.
Some mutual fund companies also offer a SIP calculator to help you estimate future returns based on the amount and duration you select.
You also can calculate the sip return from: SIP & Mutual Fund Calculator Nepal – Estimate Monthly Returns & Growth – Finance Tools Nepal
Frequently Asked Questions about SIP in Nepal
How do I start a SIP in Nepal?
You can start a SIP in Nepal by choosing an open-end mutual fund and filling out its SIP form. After selecting the amount and frequency, payments can be made via bank, cheque, or mobile banking. Units are added to your account every time you invest.
Is SIP a safe way to invest in Nepal?
Yes, SIP is considered safer than lump-sum investing because it spreads your investment over time. You buy units at different market levels, reducing timing risk. However, SIP is still market-linked, so returns depend on long-term market performance.
How does SIP work in Nepal’s mutual fund system?
SIP works by investing a fixed amount regularly into an open-end mutual fund. The fund manager uses your deposits to buy stocks and bonds, and your units grow in value as the fund’s NAV increases. This helps build wealth gradually.
What kind of returns can SIP investors expect in Nepal?
SIP returns in Nepal typically rise when the stock market performs well. For example, NIBL Sahabhagita Fund delivered an average of around 17% annually in its early years. Returns vary by scheme and market conditions.
Is SIP better than keeping money in bank savings?
Yes, SIP usually offers better long-term growth than regular bank savings. While bank rates are falling, SIP benefits from compounding and market appreciation. However, it is suitable for long-term investors willing to handle short-term fluctuations.