What is SIP?
SIP (Systematic Investment Plan) is a disciplined way to invest a fixed amount at regular intervals—usually monthly—into mutual fund schemes of your choice. It is not a separate investment product but a mode of investing that helps with rupee cost averaging because you buy more units when markets are low and fewer when they are high. Over years, compounding can grow even modest monthly amounts into a significant corpus, which is why SIPs are especially popular among salaried investors in India. This calculator models monthly SIPs only and assumes each installment is invested at the beginning of the month, matching many AMC debit schedules.
Is SIP return fixed?
No—the annual return you enter is only a planning assumption, not a promise from any fund or from markets. Equity mutual funds can have volatile year-to-year returns; debt funds are generally steadier but not fixed either. Long-term broad indices in India have often delivered roughly low-double-digit annualized returns over multi-decade windows, but your actual CAGR will depend on the schemes you pick, timing of entries and exits, and fund expenses. Always stress-test your goal with conservative return assumptions and avoid assuming the same rate every year.
Does this include tax on capital gains?
No. The maturity figure shown here is a gross estimate before personal taxes that apply when you redeem, such as long-term or short-term capital gains rules for equity and debt funds in India. Tax treatment also depends on holding period, fund category, and current law, which can change in Union Budgets. The tool does not model Securities Transaction Tax (STT) on equity funds or any separate slab-based effects on your other income. Treat the output as pre-tax wealth for illustration and discuss net-of-tax scenarios with a tax professional or SEBI-registered advisor.
Why “beginning of month”?
Many mutual fund SIP mandates debit your bank account and allot units near the start of each month, so money is invested slightly earlier than an “end of month” assumption. Mathematically, that is modeled as an annuity due—each payment earns one extra month of return compared with an ordinary annuity—which is why the formula includes the extra (1+r) factor. If your actual SIP date is mid-month, the difference in final corpus versus this model is usually small for long horizons but not zero. For other frequencies (weekly or daily) you would need different formulas or a spreadsheet built for that schedule.
How much can I earn from SIP of ₹5,000 per month?
At 12% annual return: ₹5,000/month for 10 years grows to approximately ₹11.6 lakh (₹6 lakh invested, ~₹5.6 lakh returns). For 20 years: approximately ₹49.9 lakh (₹12 lakh invested, ~₹37.9 lakh returns). For 30 years: approximately ₹1.76 crore (₹18 lakh invested, ~₹1.58 crore returns). The longer the duration, the more dramatically compounding amplifies your returns.
What is the minimum amount to start SIP in India?
Most mutual fund platforms allow SIPs starting at ₹500 per month. Some fund houses like SBI, HDFC, and Nippon offer SIPs starting at ₹100 for select schemes. There is no upper limit — you can invest lakhs per month via SIP if needed. For beginners, starting with ₹1,000-5,000 and increasing annually with income growth is a practical approach.
Is SIP better than FD (Fixed Deposit)?
For long-term goals (5+ years), SIP in equity mutual funds has historically outperformed FDs significantly. FDs offer ~6-7% fixed returns with guaranteed capital. SIP in equity funds has historically delivered 10-14% but with market risk and no capital guarantee. For short-term goals (under 3 years), FD or debt fund SIPs are safer. For long-term wealth building, equity SIPs have a strong track record. Compare with our FD Calculator.
Can I stop or pause my SIP anytime?
Yes — SIP in open-ended mutual funds can be paused, modified, or stopped at any time without penalty. You can also skip installments if your bank account does not have sufficient balance. However, stopping SIP during market downturns is one of the most common mistakes investors make — downturns are when you accumulate more units at lower prices, which benefits long-term returns.
What is the best SIP amount for a beginner?
Start with an amount you can commit consistently without financial strain — typically 10-15% of your monthly income. For someone earning ₹30,000/month, ₹3,000-5,000 SIP is reasonable. For ₹50,000/month income, ₹5,000-10,000 is practical. The exact amount matters less than consistency — it is better to invest ₹2,000 every month for 15 years than ₹10,000 for 6 months and then stop.
Does this calculator account for taxes and fees?
No — this calculator shows gross estimated returns before taxes and fund expenses. In practice, equity mutual fund returns held over 1 year are taxed as Long Term Capital Gains (LTCG) at 12.5% above ₹1.25 lakh annual gains. The fund expense ratio (typically 0.5-2%) reduces your effective return. For a ₹12% expected return with 1% expense ratio, your net return is closer to 11%. Factor these in for realistic planning.