A Systematic Investment Plan (SIP) allows you to invest a fixed amount at regular intervals (usually monthly) in mutual funds or other investment instruments.

This disciplined approach helps in accumulating wealth over time through the power of compounding, making it a popular choice among investors in India.

How are SIP returns calculated in India?

In India, the returns on an SIP are calculated based on the compound interest formula, considering regular investments, expected rate of return, and the investment duration.

The SIP calculator uses these inputs to project the future value of your investments, helping you understand how much wealth you can accumulate over a specific period.

There are several factors that determine the potential growth of your SIP investments. These are:

1. Monthly Investment Amount: The fixed sum you commit to investing at regular intervals.

2. Expected Rate of Return: The average annual return you anticipate from your investment, which varies based on the type of mutual fund and market conditions.

3. Investment Duration: The total period over which you plan to invest, typically ranging from a few years to several decades.

4. Compounding Frequency: In SIPs, compounding generally occurs annually, which means the interest earned is reinvested to generate additional returns.

5. Market Performance: Fluctuations in the financial markets can impact the actual returns on your investment, making it higher or lower than the expected rate. To ensure you stay on track with your financial goals and avoid any shortfall in your investment corpus, it's crucial to regularly assess your SIP contributions. Our SIP calculator helps you estimate the future value of your investments, allowing you to make informed decisions and adjust your investment strategy as needed. By accounting for these factors when planning your SIP, you can better align your investments with your long-term financial objectives, whether it's buying a home, funding education, or securing a comfortable retirement.