💰 SIP Calculator

A Systematic Investment Plan (SIP) allows you to invest a fixed amount at regular intervals — usually monthly — into a mutual fund or investment vehicle. The fund automatically deducts the amount from your bank account on the scheduled date, purchases fund units at the current NAV (Net Asset Value), and accumulates units over time. The combination of regular investing and compounding creates long-term wealth.

With a lump sum, you invest a large amount all at once, making you highly sensitive to market timing — buying at a market peak can take years to recover. SIP spreads your investment over time, buying more units when NAV is low and fewer when it is high, which automatically averages your cost (dollar-cost averaging). For most regular income earners, SIP is less stressful and often delivers comparable or better long-term results.

The longer the SIP duration, the more powerful the compounding effect. Financial experts generally recommend a minimum of 5 years for equity SIPs (to ride out market cycles), and 10–15 years or more to fully capture compounding benefits. A 25-year-old starting a small SIP will typically end up with far more wealth at 60 than someone starting a larger SIP at 40.

Yes — this is called a Step-Up SIP or Top-Up SIP. Many fund platforms allow you to automatically increase your monthly SIP amount by a fixed percentage or amount each year. Increasing your SIP by 10–15% annually in line with income growth is one of the most effective strategies for rapidly building wealth, as it counteracts inflation and amplifies compounding significantly.

Returns depend entirely on the type of fund chosen. Liquid/debt funds typically return 5–7% annually, hybrid funds 8–10%, large-cap equity index funds 10–12%, and small/mid-cap equity funds potentially 12–18% — but with much higher volatility and risk. The calculator uses your assumed rate for illustration only; actual returns vary and are not guaranteed. Use conservative estimates for critical financial planning.

No — market falls are actually the best time for a SIP investor. When the NAV is lower, your fixed monthly amount buys more units. When the market recovers, those extra units generate higher returns. This is the mathematical advantage of dollar-cost averaging. Most financial advisors recommend continuing or even increasing SIP amounts during market downturns, not stopping them.

XIRR (Extended Internal Rate of Return) is the actual annualized return of a SIP that accounts for the timing of each individual cash flow. Unlike simple annualized return, XIRR is more accurate for SIPs because it recognizes that each monthly investment has a different time horizon. It is the industry-standard metric for reporting SIP performance. Our calculator shows the assumed annual return as XIRR since we use a constant rate.

Most mutual funds in India allow SIPs starting from ₹100–500 per month. In the US, many investment platforms (like Fidelity, Schwab, or Vanguard) allow automatic monthly investments with no minimum or as low as $1. Micro-investing apps like Acorns or Robinhood allow even smaller amounts. The exact minimum depends on the platform and fund selected.

SIP taxation depends on your country and the type of fund. In the US, gains from stock/ETF investments held over 1 year are taxed at the lower long-term capital gains rate (0%, 15%, or 20% depending on income). Gains on units held under 1 year are taxed as ordinary income. Each SIP installment starts its own 1-year holding clock for tax purposes. In India, equity funds held over 1 year qualify for LTCG tax at 10% above ₹1 lakh. Always consult a tax advisor for your specific situation.

Missing a SIP installment typically does not result in any penalty in most jurisdictions. The fund simply skips that month's investment. However, consistent missed payments interrupt compounding, reduce your final corpus, and may trigger bank overdraft fees if the account lacks sufficient funds. To avoid this, set your SIP date just after your salary credit date and maintain a small buffer balance in your investment-linked account.