A Systematic Investment Plan (SIP) is the most popular way to invest in mutual funds in India. Instead of investing a lump sum, you invest a fixed amount every month — as little as ₹500 — and benefit from rupee cost averaging and the power of compounding over time. Our free SIP calculator shows you exactly how much your money grows.
The Power of Compounding — Real Example
If you invest ₹5,000 per month in an equity mutual fund for 20 years at an average annual return of 13% (roughly matching the Nifty 50’s historical average), here is what happens:
- Total invested: ₹12,00,000 (₹5,000 × 240 months)
- Maturity value: ₹70,44,720
- Wealth gained: ₹58,44,720
- Returns: 487% on your investment
You invested ₹12 lakhs and walked away with ₹70 lakhs. The difference — ₹58 lakhs — came entirely from compounding. This is why financial advisors say “start early, stay invested.”
SIP vs Lumpsum — When to Use Each
SIP is better when: You have a regular monthly salary, want to average out market volatility, are investing for a long-term goal (5+ years), or are new to investing and want a disciplined approach.
Lumpsum is better when: Markets have just corrected significantly, you have received a bonus or windfall, or you want to deploy idle cash sitting in a savings account earning low interest.
How to Use the SIP Calculator
- Select SIP (monthly), Lumpsum, or Goal Planner mode
- Set your monthly amount and expected annual return using the sliders
- Choose your investment period (1 to 40 years)
- Use preset buttons for popular fund categories
- Click Calculate Returns to see maturity value and wealth breakdown
Also useful: EMI Calculator for loan planning and Percentage Calculator for return percentages.
