SIP Calculator

SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds, typically every month. Instead of investing a lump sum, you spread your investment over time. Each SIP instalment buys units at the prevailing NAV, so you accumulate more units when markets are low and fewer when markets are high. This is called rupee cost averaging, and it helps reduce the impact of market volatility on your overall investment.

Most mutual fund houses in India allow you to start a SIP with as little as ₹500 per month. Some AMCs like SBI Mutual Fund and Nippon India offer SIPs starting at ₹100 for select schemes. There is no upper limit — you can invest lakhs per month via SIP if you choose.

SIP returns are calculated using the XIRR (Extended Internal Rate of Return) method, which accounts for the fact that each instalment is invested at a different time. The formula considers each monthly investment as a separate cash flow and computes the annualized return that equates the present value of all cash flows to the final corpus. This is more accurate than simple CAGR for SIP investments.

SIP is generally better for salaried investors who earn a regular income, as it enforces discipline and averages out market volatility through rupee cost averaging. Lump sum investing can yield higher returns if you invest at market lows, but timing the market is extremely difficult. Historical data from Nifty 50 shows that SIPs over 10+ years have delivered 12-15% CAGR regardless of when you started, making it a reliable wealth-building strategy for most Indian investors.

SIP investments in ELSS (Equity Linked Savings Scheme) funds qualify for tax deduction up to ₹1.5 lakh per year under Section 80C. For equity mutual fund SIPs, long-term capital gains (held over 1 year) above ₹1.25 lakh are taxed at 12.5%. Short-term capital gains (held under 1 year) are taxed at 20%. Each SIP instalment is treated as a separate investment for calculating the holding period.

Yes, SIPs in India are completely flexible. You can pause, stop, increase, or decrease your SIP amount at any time without any penalty. There is no lock-in period for SIPs (except ELSS which has a 3-year lock-in per instalment). You can also switch between funds or start multiple SIPs across different schemes.