The lock-in period in Mutual Funds means the investor cannot redeem their units before completing a predetermined period (also called the lock-in period) from the date of investment. The lock-in period applies to both lumpsum and SIP investments.

A lock-in period is essential for both investors as well as the Mutual Fund houses. To reap the benefits of investing in Mutual funds, you should hold it for a long period. Hence, by sticking to the lock-in period, you typically benefit from capital appreciation.