What is Rupee Cost Averaging in SIP?

Rupee Cost Averaging is one of the biggest benefits of a SIP. Since you invest a fixed amount regularly, you automatically buy more units when the market is low and fewer units when the market is high. This averages out your purchase cost over time and reduces the risk associated with market volatility.

What is a realistic expected rate of return for SIPs?

The rate of return is not guaranteed and depends entirely on the performance of the mutual fund you choose. Historically, equity mutual funds in India have given long-term average returns in the range of 12-15% per annum. However, past performance does not guarantee future returns. It's always wise to be conservative with your expectations.

Is SIP better than a lump sum investment?

Both have their advantages. SIP is excellent for disciplined, regular investing and benefits from rupee cost averaging, making it ideal for salaried individuals. A lump sum investment can generate higher returns if you invest when the market is low, but it requires a large initial amount and involves the risk of timing the market. For most retail investors, SIP is a more practical and less risky approach.

SIP Calculator

Plan your financial future by estimating the returns on your Systematic Investment Plan (SIP).

Monthly SIP Details

Monthly Investment₹5,000

Expected Return Rate (% p.a.)12%

Time Period (Years)10 Years

Invested Amount

₹6,00,000

Est. Returns

₹5,61,695

Total Value

₹11,61,695

Average Daily Profit

₹154

Average Monthly Profit

₹4,681

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About the SIP Calculator

Learn what a SIP is and how it helps in wealth creation through the power of compounding.

What is a SIP?

A Systematic Investment Plan (SIP) is a method of investing a fixed amount of money in mutual funds at regular intervals (usually monthly). It allows you to invest in a disciplined manner without having to time the market. SIPs are popular because they make investing accessible and help average out the cost of your investment over time, a concept known as rupee cost averaging.

What is a Lump Sum Investment?

A lump sum investment is when you invest a large amount of money all at once, rather than in smaller, regular installments like a SIP. This calculator helps you see how that single investment can grow over time due to compounding.

How to Use This Calculator

Using the SIP calculator is easy. First, choose the investment type: "Monthly SIP" for regular investments or "One-time" for a lump sum investment. Then, simply use the sliders to set your investment amount, the expected annual rate of return, and the time period in years you plan to stay invested. The calculator will then show you the projected total value of your investment, the total amount you invested, and the estimated returns you'veearned. The bar chart below provides a visual representation of how your investment grows year after year.

The Power of Compounding

The key to wealth creation with both SIPs and lump sum investments is the power of compounding. Compounding means that you not only earn returns on your principal investment, but also on the accumulated returns. Over long periods, this can lead to exponential growth of your wealth.

This calculator helps you visualize this growth. The bar chart provides a year-on-year breakdown, clearly showing how the 'Total Value' outpaces the 'Invested Amount' due to compounding.