What is SIP?

SIP or Systematic Investment Plan is a method of investing in mutual funds where you invest a fixed amount regularly (monthly/quarterly) instead of investing a lump sum amount at once. It's a disciplined approach to investing that helps you build wealth over time.

How does SIP work?

When you invest through SIP, you buy units of a mutual fund at different market levels. This helps in averaging out the cost of purchase over time, a concept known as Rupee Cost Averaging. When markets are high, you get fewer units, and when markets are low, you get more units for the same investment amount.

Benefits of SIP

• Rupee Cost Averaging: By investing regularly, you average out the cost of investment over time
• Power of Compounding: Your returns generate returns, leading to exponential growth
• Disciplined Investing: Automates your investment process and builds financial discipline
• Flexibility: You can start with as low as ₹500 per month
• No Market Timing: Removes the need to time the market perfectly
• Convenience: Automatic deductions from your bank account

SIP Calculation Formula

How to use this SIP Calculator?

Using our SIP calculator is simple:

• Enter your monthly investment amount using the slider (₹500 to ₹1,00,000)
• Set your expected annual return rate (1% to 30%)
• Choose your investment time period (1 to 40 years)
• The calculator will instantly show your invested amount, estimated returns, and total maturity value

Things to Remember

• SIP returns are market-linked and not guaranteed
• Past performance is not indicative of future returns
• Stay invested for the long term for better returns
• Review your SIP investments periodically
• Diversify across different mutual funds and asset classes
• Don't stop your SIP during market downturns

Example Calculation

If you invest ₹10,000 per month for 20 years at an expected return of 12% per annum:

• Total Investment: ₹24,00,000 (₹10,000 × 12 months × 20 years)
• Expected Returns: ₹75,98,826
• Maturity Value: ₹99,98,826

This shows how your ₹24 lakhs investment can grow to almost ₹1 crore over 20 years!