What is SIP?
SIP (Systematic Investment Plan) lets you invest a fixed amount in mutual funds every month. It uses rupee-cost averaging — you buy more units when prices are low and fewer when prices are high, reducing risk over time.
How SIP Returns are Calculated
SIP uses compound interest on each monthly investment: M = P × [(1 + r)ⁿ - 1] / r × (1 + r), where P = monthly investment, r = monthly rate, n = months.
Frequently Asked Questions
What is a good expected return rate for SIP?
Historical large-cap equity mutual funds have returned 10–14% annually in India over the long term. Debt funds return 6–8%. Use 10–12% for conservative long-term equity projections.
Is SIP better than FD?
For long-term goals (5+ years), equity SIPs have historically outperformed FDs significantly. For short-term goals, FDs are safer and more predictable.