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SIP Return Calculator
Estimate Future Wealth with the Power of Compounding
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What is a Systematic Investment Plan (SIP)?
A SIP is a method of investing a fixed sum regularly in a mutual fund scheme. It allows you to buy units on a specific date each month, helping you instill financial discipline and create wealth over the long term through the Power of Compounding.
📌 Why Start a SIP?
- Rupee Cost Averaging: You buy more units when markets are low and fewer when they are high, averaging out the cost.
- Power of Compounding: You earn returns not just on your principal, but also on the returns generated by your investment over time.
- Convenience: Amounts as low as ₹500 can be auto-debited from your bank account.
📊 Expected Returns by Asset Class
While mutual funds are subject to market risks, historical data suggests the following average annual returns:
| Fund Type | Risk Level | Avg. Expected Return |
|---|---|---|
| Equity (Large Cap) | Medium-High | 10% – 12% |
| Equity (Mid/Small Cap) | High | 12% – 15%+ |
| Balanced / Hybrid | Medium | 9% – 11% |
| Debt Funds | Low | 6% – 8% |
❓ Frequently Asked Questions
How is SIP return calculated?
SIP returns are calculated using the “Future Value of Annuity” formula. Since investments are made monthly, the interest is compounded monthly. Our calculator automates this complex math for you.
Is SIP tax-free?
Not entirely. Equity SIPs held for >1 year attract 10% LTCG tax on gains above ₹1 Lakh. Short-term gains (<1 year) are taxed at 15%. However, ELSS Mutual Funds offer tax deductions under Section 80C.
Can I lose money in SIP?
Yes, mutual funds are linked to the stock market. However, over a long period (5-10+ years), the risk reduces significantly, and the probability of negative returns is extremely low in diversified equity funds.
Can I increase my SIP amount later?
Yes, this is called a “Step-up SIP”. Most fund houses allow you to increase your monthly contribution annually to match your salary increments, helping you reach goals faster.
What is the best time to start a SIP?
The best time is NOW. In SIPs, “Time in the market” is more important than “Timing the market”. Starting early gives your money more time to compound.