Systematic Equity Plan (SEP) in stocks / SIP in stocks

Systematic Equity Plan (SEP) in stocks SIP in stocks

Systematic Equity Plan (SEP) in stocks / SIP in stocks

Investments in equity have always given good returns over a long term. However, due to stock market volatility, many of us would be afraid of direct investment in stocks even though there are best stocks to buy for long term investment. One of the answers to this is Systematic Equity plan in stocks. It is also termed as SIP in stocks. In this article, we would discuss in detail about Systematic Equity plan / SIP in stocks.

We all aware what is SIP in mutual funds

We all know the Systematic Investment plan in mutual funds. We can invest fixed amount in mutual funds through SIP every month. Based on the NAV of the mutual fund, the units for the fixed amount are allotted every month.

But, what is Systematic Equity Plan (SEP) in stocks / SIP in stocks?

Systematic Equity plan (SEP) in stocks, works similar to SIP in mutual funds. Under Systematic equity plan, you can either buy the shares within a fixed amount or you can buy a fixed quantity every month.

How does it work?

Almost all brokers are offering such SEP service now. You can directly create a SEP plan in your account for any stock. All major stocks are available for SEP plan.  

E.g. we can opt for SEP for Rs 5,000 to invest in Bharti Airtel. If we consider approx price as Rs 300 per share, we can buy (Rs 5,000 / 300 per share) 16 shares approx which costs to Rs 4,800 which is within the fixed amount indicated. However we can also opt to directly buy 16 shares every month irrespective of the price. The amount which you need to pay would depend on the price on which the transaction would get executed which may be within Rs 5,000 or beyond Rs 5,000

Below is sample example how the investments are made through this plan.

Systematic Equity Plan (SEP) in stocks, SIP in stocks

Step-by-step on how to create Systematic Equity Plan in stocks / SIP in stocks

Login to your brokerage account

Create SEP for any selected stock

You can select a fixed amount or fixed quantity

Select the date on which the SEP should be executed

You can create multiple SEP for stocks in your account.

On the specific date, ensure that required amount is available in the bank account to execute such SEP transaction.

The shares would be credited to your account by T+2 days like a normal share purchase transaction.

Lump Sum investment in stocks Vs Systematic Equity Plan in stocks

Below are the variances between these two methods.

In general scenario, you would purchase the stock as on that date with lump sum amount. Whereas, in SEP method you purchase the same stock every month on a fixed date within fixed amount or fixed quantity.

Under lump sum amount, you buy the shares at a price which might be high or low. Investors need to face subsequent market volatility. However under SEP method, the cost gets averaged out since you purchase them every month over a period of time, hence any increase or decrease in stock price would get averaged out.

Lump sum investment in stocks would work well during bear market where the stocks are available at cheap or attractive prices. Investment done in such scenario would provide excellent returns over a long run. SEP method would work well in all scenarios, however the returns are limited comparing to lump sum investment done in bear market or lump sum investment done when markets are at low.

Systematic Equity Plan is best suitable for?

While investments done in bear market always provide best returns, we cannot wait for bull market to come very often. This method is best suitable for investors who are afraid of stock market investments due to volatility, but want to gain by investing in stocks for long term. This works as a best weapon to invest any time either in bull market or bear market.

Readers, I invite your valuable suggestions and feedback on this article so that we can improve the future articles.

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Systematic Equity Plan (SEP) in stocks / SIP in stocks


  • Shubham

    Hi Suresh, Thanks for the article. Please help me with following questions:
    Why shouldn’t I go with a recurring deposit instead?
    Which one would have better returns in an ideal scenario if I buy a blue chip fund for SIP say SBI and same stock in SEP (viz. SBI)

  • sanjay

    i am beginner. I want to learn sip. i have account with sbi and axis bank as a saving account.
    Can I do it from existing account.

  • Kavitha

    Hi Suresh, Which are the good funds to invest in SEP and SIP for Longterm 3-5 years

  • Kannan

    What will be the average rate of return of SEP’s as compared to SIP’s in mutual funds

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