What is a SIP?
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund every month – even ₹500. Money is auto-debited from your bank account and units are bought at that day's NAV. Because you buy more units when markets are down and fewer when they are up, SIP averages your cost (rupee cost averaging) and builds discipline. The real magic is compounding: returns earn further returns over time.
SIP formula used
P = monthly SIP, i = expected annual return ÷ 12 ÷ 100, n = number of months. Example: ₹5,000 per month for 10 years at 12% → invested ₹6 lakh, maturity about ₹11.6 lakh. Stretch it to 20 years and the same SIP becomes roughly ₹50 lakh, while you invest only ₹12 lakh. Time is more powerful than amount.
For lumpsum the formula is simply FV = Amount × (1 + r)years.
What return should I assume?
- Large-cap / index equity funds: historically 10–12% over long periods (not guaranteed).
- Hybrid funds: around 8–10%.
- Debt funds: around 6–7.5%.
Mutual fund investments are subject to market risks. Past returns do not guarantee future returns. This calculator gives an estimate for planning only and is not investment advice.
SIP tips for beginners
- Start early – 25 saal ki age mein shuru kiya ₹3,000 SIP, 35 saal mein shuru kiye ₹10,000 SIP ko bhi beat kar sakta hai.
- Increase SIP every year with your salary hike (step-up SIP).
- Do not stop SIP when the market falls – that is when you get units cheap.
- Choose direct plans for lower expense ratio, and complete KYC once.
- Long-term equity gains above ₹1.25 lakh a year are taxed at 12.5% (LTCG); check current rules before redeeming.
Frequently asked questions (FAQ)
How much will ₹5,000 SIP give in 10 years?
At an assumed 12% annual return, ₹5,000 per month for 10 years can grow to about ₹11.6 lakh on an investment of ₹6 lakh.
Is SIP return guaranteed?
No. Mutual fund returns depend on the market. The calculator only shows an estimate based on the return you assume.
SIP aur lumpsum mein kya better hai?
Regular salary walon ke liye SIP better hai kyunki risk average hota hai. Agar ek saath bada amount hai to lumpsum ya STP use kar sakte hain.
What is the minimum SIP amount?
Many mutual funds allow SIPs from ₹100 to ₹500 per month.
Which formula does this SIP calculator use?
It uses the standard future value of annuity-due formula with monthly compounding, the same one used by AMFI and most fund houses.