Monthly investment ($)
Expected annual return (%)
Time period (years)
Result
About SIP
What is SIP?
Systematic Investment Plan — investing a fixed amount monthly in mutual funds or index funds, benefiting from rupee-cost averaging.
Compounding power
Starting early is critical. Rs 5,000/month at 12% for 30 years grows to over Rs 1.76 crore despite only Rs 18 lakh invested.
Returns note
Expected return is an estimate. Actual mutual fund returns vary. Equity funds historically average 10–15% over long periods.
Frequently Asked Questions
What is SIP?
Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly (monthly) into mutual funds or index funds. It automates investing and benefits from rupee-cost averaging — buying more units when prices are low and fewer when high.
What is the SIP return formula?
Future Value = P × ((1+r)ⁿ − 1) / r × (1+r), where P = monthly investment, r = monthly return rate (annual rate / 12 / 100), n = total months invested.
What is rupee-cost averaging?
Because you invest a fixed amount regardless of market conditions, you automatically buy more units when prices fall and fewer when prices rise. Over time, this averages out your cost per unit and reduces the impact of market volatility.
SIP vs Lump Sum — which is better?
SIP is better for regular salaried investors as it removes the need to time the market and builds discipline. Lump sum can outperform during strong bull markets if timed correctly, but carries higher risk. Most financial advisors recommend SIP for retail investors.
What return rate should I use for calculations?
Indian equity mutual funds have historically returned 12–15% annually over 10+ year periods. Conservative estimates use 10–12%. Debt funds average 6–8%. Always use conservative estimates for financial planning.