What is a SIP?
A systematic investment plan invests a fixed amount in a mutual fund every month. Because you buy more units when prices are low and fewer when they are high, SIPs average out your purchase cost and remove the need to time the market.
How SIP returns are calculated
Maturity = A × ((1 + i)ⁿ − 1) ÷ i × (1 + i), where A is the monthly amount, i the monthly return and n the number of instalments. ₹10,000 a month at 12% for 10 years means ₹12 lakh invested and a corpus of about ₹23.2 lakh.
What return should you assume?
Over 10+ years Indian large-cap equity funds have historically delivered 11–13% a year, mid and small caps more with higher volatility, and debt funds 6–8%. Use 10–12% for equity and 7% for debt when planning; anything higher is optimistic.
Step-up SIPs
Increasing your SIP by 10% every year as your salary grows roughly doubles the final corpus over 15 years compared with a flat SIP, with no change to your lifestyle today.
Frequently asked questions
Is SIP better than lumpsum?
SIPs suit regular income and volatile markets; a lumpsum does better if markets rise steadily after you invest. Most salaried investors use SIPs for discipline.
Are SIP returns guaranteed?
No. Mutual funds are market-linked. The calculator shows an estimate at the rate you enter, not a promise.
How are SIP gains taxed?
Equity funds held over a year attract 12.5% long-term capital gains tax on gains above ₹1.25 lakh a year; shorter holdings are taxed at 20%.
Can I stop or pause a SIP?
Yes. SIPs can be paused, modified or stopped any time without penalty; exit loads may apply if you redeem within a year.