What is SIP in stocks?
SIP stands for systematic investment plan: investing the same amount at fixed intervals, whatever the market is doing. Most investors know it from mutual funds, where a bank mandate buys fund units every month. In a stock SIP, each instalment buys shares or ETF units on NSE or BSE instead, and they are credited to your demat account.
Because the amount is fixed, it buys more units when the price is low and fewer when it is high. This is called rupee cost averaging.
Averaging does not stop the holding from losing value if prices keep falling.
How a stock SIP works in QuantPower
- Choose the stocks or ETFs and the amount for each.
- Set the schedule: how often the instalments go out, and on which day.
- Keep funds in your trading account. Each instalment is a normal delivery buy, so the money must be with your broker on the SIP day.
- QuantPower places the orders on each SIP date through your broker. Shares and ETF units are bought in whole numbers, so an instalment buys only as many as its amount covers.
- Check the fills. The orders appear in your broker's order book and contract note, and the shares reach your demat account on the next trading day under T+1 settlement.
- Review the plan every few months, including what the orders cost.
SIP orders go out like any other order from QuantPower: from your own broker account through the broker's official API, with your own API key, from the static IP you register with your broker, after you complete the broker's daily login with two-factor authentication, and within the order-rate limit for self-built algos. QuantPower runs on your own computer or VPS, so your API key stays with you. Broker sessions end before each trading day, so on SIP days keep that computer or VPS on and logged in to your broker during market hours. If you have not logged in to your broker on a SIP day, no order can go out, so check the order book after each SIP date. Your money and shares stay with your broker and depository throughout.
Stock SIP vs mutual fund SIP
| Mutual fund SIP | Stock or ETF SIP | |
|---|---|---|
| What it buys | Fund units at the day's NAV | Shares or ETF units at the market price |
| Fractions | Fractional units allowed | Whole shares only |
| Payment | A bank mandate debits each instalment | Funds must be in your trading account |
| Who picks the holdings | The fund manager, or the index for index funds | You |
| Ongoing cost | Expense ratio deducted inside the fund | None on shares; ETFs have an expense ratio |
| Cost per instalment | No brokerage on direct plans | Brokerage, STT, stamp duty and exchange charges |
| Selling | Redeem at NAV | Sell on the exchange; a DP charge applies |
ETF vs stocks for a SIP
| ETF | Single stocks | |
|---|---|---|
| Diversification | Many companies in one unit | One company per order |
| Unit price | Often low, so whole-unit rounding is small | Can be thousands of rupees a share |
| STT | Nil on buy, 0.001% on sell | 0.1% on buy and on sell |
| Ongoing cost | Expense ratio | None |
| Main risk | The index or sector it tracks, plus tracking error | The company itself |
| Effort | Low once chosen | Research on each company |
Lists of the best ETFs for SIP usually rank funds by past returns. QuantPower does not recommend ETFs or stocks. If you compare ETFs yourself, these checks matter more than last year's return:
- What it tracks: a broad index, a sector or a theme.
- Expense ratio: the yearly fee taken from the fund.
- Tracking error: how closely the ETF follows its index.
- Liquidity: daily volume and the bid-ask spread, since you buy at the market price.
- Price against iNAV: a thinly traded ETF can trade well above or below its indicative value.
What each SIP order costs
| Charge | Shares | Equity ETFs | When |
|---|---|---|---|
| Brokerage | ₹0 to ₹20 an order, by broker | Same | Each executed order |
| STT | 0.1% | Nil on buy, 0.001% on sell | Buy and sell |
| Stamp duty | 0.015% | 0.015% | Buy |
| Exchange and SEBI charges | About 0.003% | Same | Buy and sell |
| GST | 18% on brokerage and exchange charges | Same | Buy and sell |
| DP charge | A flat fee per company, set by your broker and depository | Same | Each day you sell |
Brokerage weighs most on small instalments. At ₹20 an order, brokerage alone is 0.4% of a ₹5,000 instalment before GST, while a broker that charges nothing for delivery removes most of the buy-side cost. A weekly plan places more than four times as many orders as a monthly one, and a plan with five stocks places five orders each time, or 60 a year on a monthly schedule.
The SIP calculator works out what a plan could grow to after these charges and tax, and the brokerage calculator breaks down a single order line by line.
Tax on a stock SIP
Each instalment has its own purchase date, so its holding period is counted separately, and the oldest units are treated as sold first. For listed shares and equity ETFs in tax year 2026-27, gains on units held for up to 12 months are taxed at 20%. Gains on units held longer are taxed at 12.5% on the amount above ₹1.25 lakh a year. Both carry 4% cess. Dividends are added to your income and taxed at your slab rate. Confirm your own position with a tax professional.
Who a stock SIP suits
- Direct owners: investors who want shares or ETF units in their own demat account.
- Existing broker clients: those who want a regular plan on the account they already trade from.
- Self-directed investors: those comfortable choosing their own stocks or index ETFs.
It suits less well when the instalment is small next to the share price, or when you want a fund manager to choose and rebalance the holdings.
Plans
The QuantPower Standard plan is free during the Beta (₹299/month after); Professional is ₹499/month and Ultimate ₹999/month, GST extra. See pricing. Brokerage and charges on each SIP order are paid to your broker, not to QuantPower.
Related guides
- SIP calculator: what a plan could grow to after charges and tax
- Brokerage calculator: the charges on one order, line by line
- Stock profit calculator: the profit on a holding after charges and tax
- Compound interest calculator: how a starting amount grows with regular additions
- STT tax calculator: STT on shares, ETFs and F&O
Start your free trial
Connect your broker, build a strategy and test it on paper before a single live order goes out.
Frequently asked questions
What happens if a share costs more than my instalment?
The instalment cannot buy a share, because stock orders are in whole shares. Raise the amount for that stock, or choose an instrument with a lower unit price.
Do I need F&O activation for a stock SIP?
No. SIP orders are delivery buys in the cash segment, so an equity trading account with a linked demat account is enough.
Where are my SIP shares held?
In your own demat account, through your broker. QuantPower is software; it never holds your money or your shares.
Does QuantPower suggest which stocks or ETFs to buy?
No. QuantPower is not an investment adviser and gives no tips or recommendations. You choose the stocks or ETFs, the amounts and the schedule.
Do I receive dividends on SIP shares?
Yes. The shares are held in your name, so dividends are paid to the bank account linked to your demat account and taxed at your slab rate.
Is a stock SIP cheaper than a mutual fund SIP?
It depends on the instalment. Shares carry no expense ratio but pay charges on every order; a direct mutual fund plan has no brokerage but deducts an expense ratio every year. For small instalments, per-order brokerage can make a stock SIP the costlier option.
Sources
- Income-tax Act 2025: capital gains on listed equity shares and equity-oriented funds, tax year 2026-27 (checked 20 October 2026)
- NSE: STT, stamp duty and transaction charges on delivery trades (checked 20 October 2026)
- Zerodha, Upstox, Fyers and IIFL Capital: published brokerage and DP charge pages (checked 10 October 2026)
- SEBI: safer participation of retail investors in algorithmic trading, 4 February 2025
- QuantPower features and plans as listed on quantpower.tech (checked 20 October 2026)