In an SIP, a fixed amount gets deducted from your bank automatically every month. This amount gets invested in the funds selected by you. Since this happens through monthly installments, you end up buying mutual funds
every month at varying prices. This helps you average out your purchase price.
The key benefit of an SIP is that it helps in generating large amount of wealth as disciplined investment over long periods of time lets compounding work its magic.Also, one key thing to note here is that periodic declines in the stock market is actually good for an SIP investor as you end up buying more units at lower prices.To understand more about how SIPs work - read here