How SIP returns are calculated
Each monthly instalment compounds until maturity: FV = P × ((1+i)ⁿ − 1)/i × (1+i), where P is the monthly SIP, i the monthly rate (annual ÷ 12) and n total months. With step-up enabled, the SIP amount rises by the chosen % each year — a powerful way to match investments to salary growth.
FAQ
What return should I assume?
Indian equity mutual funds have historically delivered 10–14% annually over long periods, but returns are market-linked and not guaranteed. Try 10% for a conservative view and 14% for an optimistic one.
Is SIP better than a lump sum?
SIPs average your purchase cost across market ups and downs (rupee-cost averaging) and suit monthly incomes. A lump sum can beat SIP in a steadily rising market, but requires the capital and timing confidence.