📐 Formula Used
A = P × [((1 + r)^n – 1) / r] × (1 + r) where P = monthly SIP, r = monthly rate, n = months
Frequently Asked Questions
What is SIP?
SIP (Systematic Investment Plan) is a method of investing a fixed amount in a mutual fund scheme at regular intervals — typically monthly. It harnesses rupee-cost averaging and the power of compounding.
How is SIP return calculated?
SIP maturity = P × [((1 + r)ⁿ – 1) / r] × (1 + r), where P is monthly investment, r is monthly rate, and n is number of months.
Is SIP better than Lumpsum?
SIP is generally better for regular investors as it reduces timing risk through rupee-cost averaging. Lumpsum is better when markets are at a bottom and you have a large idle corpus.
What is a good SIP return rate?
Equity mutual funds have historically delivered 10–15% CAGR over 10+ years in India. Use 10–12% as a conservative estimate for long-term projections.