SIP Calculator

What is a SIP and how is it different from a lumpsum investment?

A SIP (Systematic Investment Plan) means investing a fixed amount every month into a mutual fund, like ₹5,000 on the 5th of each month. A lumpsum is a one-time investment of a larger amount, like ₹6,00,000 invested all at once. SIP builds the habit of investing and spreads your purchase price across market ups and downs; lumpsum puts all your money to work immediately.

What is rupee cost averaging?

When you invest a fixed amount every month, you automatically buy more mutual fund units when prices are low and fewer units when prices are high. Over time this averages out your purchase cost, so you don't need to time the market. A ₹5,000 SIP might buy 100 units in a falling month and 70 units in a rising month — you never put all your money in at the peak.

Is SIP better than lumpsum, or should I do both?

SIP works best when you have a steady monthly income and want to invest gradually, reducing the risk of investing a large sum right before a market fall. Lumpsum works best when you already have a large amount sitting idle (like a bonus or inheritance) and markets are reasonably valued, since it compounds from day one. Many investors do both — a bonus goes in as lumpsum, and salary savings go in as SIP.

What is a step-up SIP?

A step-up (or top-up) SIP automatically increases your monthly investment by a fixed percentage every year — commonly 10%. If you start at ₹5,000/month and step up 10% annually, your SIP becomes ₹5,500 in year 2, ₹6,050 in year 3, and so on. Over 15-20 years this can nearly double your final corpus compared to a flat SIP, since it matches rising income with rising investment.

What happens if I miss a SIP payment?

Missing one or two SIP instalments due to insufficient bank balance usually doesn't cancel your SIP — most fund houses give a grace period and simply skip that month's debit. However, missing 3 consecutive instalments can lead to automatic SIP cancellation by some AMCs. It won't hurt your credit score, but it does reduce your final corpus since you lose out on that month's investment and its compounding.

What is an ELSS fund and why is it linked to SIPs?

ELSS (Equity Linked Savings Scheme) is a category of equity mutual fund that qualifies for tax deduction under Section 80C (up to ₹1.5 lakh per year) in India. Running an ELSS fund through a SIP lets you save tax and build wealth simultaneously, though each SIP instalment is locked in for 3 years from its own investment date — the shortest lock-in among all 80C options.

How much should my ideal monthly SIP be?

A common rule of thumb is to invest 20-30% of your monthly take-home income. If you earn ₹60,000/month, that's roughly ₹12,000-₹18,000 across SIPs. A more goal-based approach: use the Savings Goal Calculator to work backward from a target corpus (like ₹1 crore in 20 years) to find the exact monthly SIP required at your expected rate of return.

Are SIP returns guaranteed?

No. SIP returns depend entirely on the performance of the underlying mutual fund, which invests in equity, debt, or a mix of both. This calculator uses a fixed expected annual return you enter (commonly 10-15% for equity funds over the long term) to project growth, but actual year-to-year returns will fluctuate and could be negative in some years. SIPs reduce timing risk — they don't eliminate market risk.