About SIP Calculator & FAQs
What is a Systematic Investment Plan (SIP)?
A SIP is a method of investing a fixed sum of money regularly (usually monthly) into mutual funds or other investment schemes. It promotes disciplined investing by automating contributions.
What are the benefits of investing via SIP?
Benefits include: Rupee Cost Averaging (you buy more units when prices are low and fewer when prices are high), Power of Compounding (returns earned also start earning returns), Disciplined Investing, and Affordability (start with small amounts).
How does this SIP calculator work?
This calculator projects the future value of your SIP investments. You input your monthly investment amount, the expected annual rate of return, and the duration (in years) you plan to invest. It then estimates the total value of your investments and the total interest earned, along with a year-wise breakdown of growth.
Can I miss a SIP payment?
While it's best to be consistent, missing a SIP payment might lead to the SIP being paused or discontinued after a few missed installments, potentially with a small penalty. This calculator assumes all payments are made consistently.
What to choose - SIP or Lumpsum?
SIPs are ideal for regular, disciplined investing and benefit from rupee cost averaging. Lumpsum is suitable if you have a large sum to invest at once. Your choice depends on your income flow, risk appetite, and market view.
Do SIPs offer Tax Benefits?
Investing in Equity Linked Savings Schemes (ELSS) via SIP can offer tax benefits under Section 80C of the Income Tax Act in India. However, not all SIPs are tax-saving; it depends on the underlying scheme.