What is SIP? - Smart Investment Strategy
A Systematic Investment Plan (SIP) is a
disciplined mutual fund investment approach where you invest fixed
amounts regularly (monthly/quarterly). This
powerful wealth creation tool leverages rupee
cost averaging and compounding to help achieve long-term financial
goals.
Did You Know? ₹10,000 monthly SIP at 12% annual
returns grows to ₹23.23 lakh in 10 years!
SIP Calculation Formula & Working
Our SIP return calculator uses the proven mutual
fund SIP formula:
Maturity Value = P × [(1 + r)^n - 1] × (1 + r)/r
Where:
P = Monthly SIP Amount
r = Monthly Return Rate (Annual Return/12)
n = Total Number of Months
SIP Investment Example: ₹15,000 Monthly SIP
| Year |
Total Investment |
Estimated Returns |
Total Value |
| 1 |
₹1,80,000 |
₹11,342 |
₹1,91,342 |
| 5 |
₹9,00,000 |
₹4,32,193 |
₹13,32,193 |
| 10 |
₹18,00,000 |
₹24,56,231 |
₹42,56,231 |
| 15 |
₹27,00,000 |
₹75,84,762 |
₹1,02,84,762 |
*Assumes 12% annual returns. Actual mutual fund returns may vary.
Top 5 Benefits of SIP Investment
💰 Power of Compounding
Earn returns on your returns - ₹10,000/month becomes ₹3.2
crore in 30 years at 12% returns
📉 Rupee Cost Averaging
Buy more units when markets fall, fewer when they rise -
reduces average cost
🎯 Goal-Based Investing
Plan for retirement, child education, or house purchase
systematically
💸 Affordable Investing
Start with just ₹500/month - perfect for beginners and
seasoned investors
SIP vs Lumpsum: Which is Better?
While lumpsum investments can give higher returns
in rising markets, SIP mutual funds are safer for
volatile markets:
- ₹10 lakh lumpsum at -20% first year = ₹8 lakh
- ₹10k/month SIP buys more units when prices drop
-
Average 12% SIP returns over 5+ years reduce market timing risk
SIP FAQs
Most mutual funds allow SIP investments starting from ₹500
per month. Some even offer ₹100/month plans.
The best time to start SIP is now. Regular investments over
time matter more than trying to time the market.
Yes, SIP investments in open-ended funds can be redeemed
anytime, but staying invested for 5+ years typically yields
better returns.
SIP reduces risk through rupee cost averaging but doesn't
eliminate market risk. It's generally considered less
volatile than lump-sum investments.