SIP Calculator
Plan your mutual fund investments and estimate returns over time
Investment Details
Projected Returns
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About SIP
Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds. By investing a fixed amount regularly, you benefit from rupee cost averaging and the power of compounding over time. This calculator helps you estimate potential returns based on your investment amount and expected rate of return.
Frequently Asked Questions
What is SIP and how does it work?
SIP (Systematic Investment Plan) is a method of investing in mutual funds where you invest a fixed amount regularly (monthly/quarterly). It helps build wealth through rupee cost averaging and power of compounding. You buy more units when prices are low and fewer when prices are high.
What is the minimum amount to start a SIP?
Most mutual funds in India allow SIPs starting from ₹500 per month. Some funds may have higher minimums (₹1,000-₹5,000). There's no maximum limit. You can increase or decrease your SIP amount based on your financial situation.
Can I stop or pause my SIP?
Yes, you can pause your SIP for a specified period or stop it completely at any time without penalty. However, it's recommended to continue SIPs during market downturns to benefit from rupee cost averaging. You can also modify the SIP amount anytime.
What is a good return rate to expect from SIP?
Historical data shows equity mutual funds in India have generated 10-15% annualized returns over long periods (10+ years). However, past performance doesn't guarantee future returns. Returns vary based on fund type, market conditions, and investment duration. Conservative debt funds may give 6-8%.
Is SIP better than lump sum investment?
SIP is better for regular income earners as it promotes disciplined investing, reduces timing risk through averaging, and suits those without large capital. Lump sum works better when you have surplus cash and markets are undervalued. SIP is less stressful and more suitable for most retail investors.
Are SIP returns guaranteed?
No, SIP returns are not guaranteed as they depend on market performance. However, SIPs in equity funds historically provide better returns than fixed deposits over long periods (7+ years). Debt funds provide more stable but lower returns. Diversification across fund types can manage risk.
How to Use This Calculator
- 1
Enter your planned monthly investment amount. Start small if you're new to investing (₹1,000-₹5,000) and increase gradually.
- 2
Set the expected annual return rate based on your fund type. Equity funds: 10-15%, Hybrid funds: 8-12%, Debt funds: 6-8%.
- 3
Choose your investment time period in years. For equity funds, a minimum of 5-7 years is recommended for wealth creation.
- 4
Review the results showing total invested amount, estimated returns, and final corpus with a visual breakdown of investment vs returns.
Key Terms & Definitions
- SIP (Systematic Investment Plan)
- A disciplined investment approach where you invest a fixed amount at regular intervals in a mutual fund scheme.
- NAV (Net Asset Value)
- The per-unit market value of a mutual fund scheme. Your investment amount divided by NAV gives you the number of units.
- Rupee Cost Averaging
- The benefit of buying more units when prices are low and fewer when prices are high, averaging out the purchase cost over time.
- Compounding
- The process where returns earned on your investment also earn returns, leading to exponential growth over long periods.
- Equity Funds
- Mutual funds that invest primarily in stocks. Higher risk but potentially higher returns over long term (10-15% historically).
- Debt Funds
- Mutual funds investing in fixed-income securities like bonds, government securities. Lower risk with moderate returns (6-8%).
Formulas & Calculations
SIP Future Value Formula
This calculates the maturity amount of your SIP. Example: ₹5,000 monthly for 10 years at 12% annual return gives FV = ₹11,61,695 (₹6L invested + ₹5.6L returns).
Total Returns Calculation
This gives your absolute profit. If FV is ₹11.6L and you invested ₹5,000 × 120 months = ₹6L, your returns are ₹5.6L (93% gain).
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