How SIP Works
SIP (Systematic Investment Plan) allows you to invest a fixed amount regularly in mutual funds. Instead of timing the market, you invest consistently and benefit from rupee-cost averaging.
Formula Used
FV = P × [((1 + r)^n - 1) / r] × (1 + r)
- P: Monthly investment amount
- r: Monthly rate of return (annual rate / 12 / 100)
- n: Total number of months
Benefits of SIP
- Disciplined investing: Automated monthly investments
- Rupee-cost averaging: Buy more units when markets are low
- Power of compounding: Returns generate more returns
- Flexibility: Start with as little as ₹500/month
Realistic Return Expectations
- Equity mutual funds: 10-12% long-term (15+ years)
- Hybrid funds: 8-10%
- Debt funds: 6-8%
Disclaimer: This calculator provides estimates for educational purposes only. Not SEBI-registered investment advice.