SIP Calculator
Calculate expected returns on your Systematic Investment Plan in mutual funds.
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What is a SIP (Systematic Investment Plan)?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount of money at regular intervals (typically monthly) in mutual funds. It allows you to build wealth gradually without needing a large lump sum upfront. SIPs work on the principle of rupee cost averaging, meaning you buy more units when prices are low and fewer when prices are high, effectively reducing your average cost over time.
How SIP Returns are Calculated
SIP returns are calculated using the future value of an annuity formula:
FV = M × [(1 + r)n − 1] / r × (1 + r)
Where M = monthly investment, r = monthly rate of return (annual rate / 12 / 100), n = total number of months.
SIP vs Lump Sum Investment
| Feature | SIP | Lump Sum |
|---|---|---|
| Investment Style | Regular, fixed amounts | One-time investment |
| Market Timing | Not required | Important for good returns |
| Risk Level | Lower (rupee cost averaging) | Higher (depends on entry point) |
| Best For | Salaried individuals | Those with surplus funds |
| Minimum Amount | ₹500/month | ₹1,000-5,000 |
Tips for SIP Investors
- Start early and stay consistent. Even ₹5,000/month for 25 years at 12% grows to over ₹95 lakhs.
- Increase SIP annually. Step-up your SIP by 10% each year to dramatically boost your corpus.
- Choose the right fund category. Equity funds for long-term (7+ years), debt funds for short-term (1-3 years).
- Don't stop during market crashes. SIPs actually benefit from crashes through more units at lower prices.
- Review annually, not daily. Check fund performance yearly and switch only if consistently underperforming for 2+ years.
Plan Your SIP
Enter your monthly investment amount and see how your wealth grows over time.
Calculate NowFrequently Asked Questions
SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds. It allows you to invest small amounts periodically instead of a lump sum, benefiting from rupee cost averaging and compounding.
You can start with as little as ₹500/month. For meaningful wealth creation, aim to invest 15-20% of your monthly income. Even ₹5,000/month can grow to over ₹1 crore in 20 years at 12% returns.
No, SIP returns are market-linked and not guaranteed. However, equity mutual funds have historically delivered 12-15% average annual returns over 10+ year periods. SIPs reduce risk through rupee cost averaging.
Yes, SIPs are flexible. You can pause, stop, increase, or decrease your SIP amount at any time without penalty. There's no lock-in period for most open-ended funds (except ELSS with 3-year lock-in).
SIP is generally better for most investors as it eliminates market timing and reduces risk. Lump sum can outperform if invested at market lows, but timing consistently is nearly impossible.