Interactive SIP Calculator

SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly (usually monthly) in mutual funds or other investment vehicles. Instead of investing a lump sum, you invest smaller amounts at regular intervals. Where P is the monthly investment amount, r is the monthly rate of return (annual rate ÷ 12 ÷ 100), and n is the total number of months. The formula accounts for compound interest, meaning your returns generate their own returns over time.

Expected returns vary by asset class and market conditions:

• 6-8%: Conservative — debt funds, fixed deposits, bonds
• 8-12%: Moderate — balanced/hybrid funds, index funds
• 12-16%: Aggressive — equity-focused mutual funds, mid/small-cap
• 16%+: High-risk — sectoral funds, direct equity (not guaranteed)

For long-term planning, 10-12% is a reasonable assumption for diversified equity mutual funds, though actual returns may vary year to year.

Rupee cost averaging is the key advantage of SIP investing. When markets fall, your fixed monthly amount buys more units; when markets rise, it buys fewer units. Over time, this averages out your purchase price.

For example, if you invest $500/month:

• Month 1: Price $100 → You get 5 units
• Month 2: Price drops to $50 → You get 10 units
• Month 3: Price rises to $80 → You get 6.25 units

Total: 21.25 units for $1,500 invested. Average cost = $70.59/unit — lower than the simple average of $76.67.

Yes, absolutely. This is called a "step-up SIP" and is one of the most powerful wealth-building strategies:

• Increase by 10% annually: If your income grows, increase your SIP by at least 10% each year
• Match inflation: At minimum, increase your SIP to keep pace with inflation (6-8%)
• Bonus allocations: Invest annual bonuses or salary hikes directly into SIP

A $500/month SIP at 12% for 20 years = $4.9 lakhs. But increasing by 10% yearly = $12.8 lakhs — that's 2.6x more wealth from just a modest annual increase.

SIP (Systematic): Invest fixed amounts regularly. Best for most investors — removes timing risk, enforces discipline, and benefits from rupee cost averaging.

Lump Sum: Invest everything at once. Can give higher returns if markets are low, but carries timing risk. Better for experienced investors with large amounts and a long horizon.

Which is better? For 90% of investors, SIP is the recommended approach. It removes emotion from investing, requires less market knowledge, and works well across all market conditions. Consider combining both — SIP for regular investing, lump sum during market corrections.