SIP Calculator
Calculate returns from Systematic Investment Plan
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About SIP Calculator
A SIP (Systematic Investment Plan) calculator helps you estimate the future value of your monthly investments in mutual funds. It's a powerful tool for planning your financial goals and understanding how small, regular investments can grow into substantial wealth over time through the power of compounding.
How Does SIP Work?
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You invest a fixed amount every month in a mutual fund scheme
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Your money grows based on the expected annual return rate
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The returns are compounded monthly, meaning you earn returns on your returns
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Over time, this disciplined approach helps build wealth through rupee cost averaging
Example:
If you invest ₹5,000 monthly for 10 years at 12% annual return, you'll invest ₹6 lakhs but your total corpus will grow to approximately ₹11.6 lakhs, giving you returns of ₹5.6 lakhs!
Key Benefits
Disciplined Investing: Automates your investment process with fixed monthly contributions
Power of Compounding: Your returns generate more returns over time
Rupee Cost Averaging: Buy more units when prices are low and fewer when high
Flexibility: Start with as low as ₹500 per month and increase anytime
Tax Benefits: Invest in ELSS SIP for tax deduction under Section 80C
Wealth Creation: Build substantial corpus for long-term goals like retirement or children's education
Frequently Asked Questions
What is a good SIP amount to start with?
You can start with as low as ₹500 per month. However, financial experts recommend investing at least 10-15% of your monthly income. Start with what you're comfortable with and gradually increase as your income grows.
Which is better - SIP or lumpsum investment?
SIP is ideal for salaried individuals who get regular income and want to invest systematically. Lumpsum works well when you have a large amount available. SIP offers the benefit of rupee cost averaging and is less risky for beginners.
Can I stop or pause my SIP anytime?
Yes, SIPs are completely flexible. You can stop, pause, or modify your SIP amount anytime without penalties. However, it's recommended to continue SIPs for long-term wealth creation.
What return rate should I expect from SIP?
Historical data shows equity mutual funds have given 12-15% annual returns over 10+ years. However, past performance doesn't guarantee future returns. It's wise to be conservative and expect 10-12% for planning purposes.
How is SIP different from a recurring deposit (RD)?
SIP invests in market-linked mutual funds with potential for higher returns (10-15%) but with market risk. RD is a fixed-income instrument offering guaranteed but lower returns (5-7%). SIP is better for long-term wealth creation, while RD suits risk-averse investors seeking guaranteed returns.
Can I have multiple SIPs running simultaneously?
Yes, you can run multiple SIPs across different mutual fund schemes. This helps in diversification - you can invest in large-cap, mid-cap, debt funds, and sectoral funds simultaneously. Many investors run 3-5 SIPs to spread risk and optimize returns.
What is the minimum and maximum SIP tenure?
There's no mandatory minimum or maximum tenure for SIP. You can continue as long as you wish. However, to benefit from compounding, experts recommend staying invested for at least 5-10 years. Some funds have a lock-in period (e.g., ELSS has 3 years), but regular SIPs don't.
What happens if I miss a SIP installment?
Missing 1-2 SIP installments is usually fine - your SIP won't be cancelled immediately. However, if your bank account has insufficient funds for 3 consecutive months, the SIP may be auto-cancelled. You can restart it anytime. Set up auto-debit and maintain sufficient balance to avoid disruptions.
Should I invest in SIP during market highs or lows?
The beauty of SIP is that you don't need to time the market! SIP works on rupee cost averaging - you buy more units when markets are low and fewer when high. Start your SIP regardless of market conditions and stay invested for the long term.
Are SIP returns taxed? What about LTCG and STCG?
Yes, SIP returns are taxable. For equity funds: Long-term gains (held >1 year) above ₹1 lakh are taxed at 10% LTCG. Short-term gains (<1 year) are taxed at 15% STCG. For debt funds: Gains are added to your income and taxed as per your tax slab. ELSS SIPs qualify for ₹1.5 lakh deduction under Section 80C.
Can I increase or decrease my SIP amount later?
Yes, most fund houses allow you to increase your SIP amount through a 'SIP Top-up' or 'Step-up SIP' facility. You can set it to auto-increase by a fixed amount or percentage annually. To decrease, you'd need to stop the current SIP and start a new one with a lower amount.
What is SIP step-up and why should I use it?
SIP step-up allows you to automatically increase your SIP amount annually by a fixed percentage (say 10%). As your income grows, your investments grow too. For example, a ₹5,000 monthly SIP with 10% annual step-up becomes ₹5,500 in year 2, ₹6,050 in year 3, significantly boosting your final corpus over 15-20 years.