SIP Calculator

SIP (Systematic Investment Plan) lets you invest a fixed amount in mutual funds at regular intervals (usually monthly). It leverages rupee cost averaging — buying more units when prices are low and fewer when high — reducing market timing risk.

SIP uses compound interest on each instalment. Future Value = P × [((1+r)^n - 1) / r] × (1+r), where P = monthly investment, r = monthly rate of return, n = total months. Each instalment compounds independently from its investment date.

Historical averages: Large-cap equity funds — 10-12% p.a., Mid-cap — 12-15% p.a., Small-cap — 14-18% p.a., Balanced/hybrid — 8-10% p.a., Debt funds — 6-8% p.a. Past returns don't guarantee future performance.

SIP reduces risk through rupee cost averaging and is better for volatile markets and regular income earners. Lump sum may outperform in consistently rising markets. Many investors use both: SIP for regular savings and lump sum when markets dip.