SIP Calculator
Calculate projected returns for your Systematic Investment Plans (SIP) with our free online SIP Calculator. Plan your mutual fund investments and wealth creation journey.
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What is a SIP Calculator?
A Systematic Investment Plan (SIP) calculator is a simple tool that allows individuals to get an idea of the returns on their mutual fund investments made through SIP. SIP investments in mutual funds have become one of the most popular investment options for millennials.
Strategies for SIP
- Start Early: The earlier you start, the more time your money has to grow.
- Stay Consistent: Regular investments smoothen out market fluctuations.
- Increase Gradually: Step up your SIP amount annually as your income grows.
Frequently Asked Questions
What is SIP (Systematic Investment Plan)?
SIP stands for Systematic Investment Plan. It is a method of investing a fixed sum systematically in a mutual fund scheme at regular intervals (monthly, quarterly) rather than a lump sum.
How is SIP return calculated?
SIP returns are calculated using the XIRR (Extended Internal Rate of Return) method or the Future Value of Annuity formula. Our calculator uses the FV formula for monthly compounding estimates.
Is SIP better than Lumpsum?
For most salaried investors, SIP is better because it instills discipline and benefits from Rupee Cost Averaging (buying more units when the market is low). Lumpsum is risky if the market is at a peak.
Can I stop my SIP anytime?
Yes, you can pause or stop your SIP anytime without a penalty from the mutual fund house. However, exit loads may apply if you withdraw the money within 1 year.
What is a good SIP return rate to expect?
For equity mutual funds, long-term returns (10+ years) typically range from 10% to 15%. Debt funds may offer 6-8%. We recommend using a conservative estimate of 12% for equity SIPs.
Does this calculator account for inflation?
No, this standard SIP calculator shows nominal returns. To see inflation-adjusted values, subtract the inflation rate from your expected return rate (e.g., use 7% instead of 12% if inflation is 5%).
What is Power of Compounding in SIP?
Compounding means earning returns on your returns. In SIP, your earnings are reinvested, leading to exponential growth over time. The longer you stay invested, the more powerful compounding becomes.
Is SIP income taxable?
Yes. Equity SIP withdrawals are subject to Capital Gains Tax. Short Term (less than 1 year) is 15%. Long Term (more than 1 year) is 10% on gains exceeding ₹1 Lakh.
Can I increase my SIP amount later?
Yes! This is called a 'Step-up SIP'. Increasing your SIP by even 10% annually can drastically increase your final corpus compared to a fixed SIP.
What is the minimum amount for SIP?
Most mutual funds allow you to start a SIP with as little as ₹500 per month.