SIP or Systematic Investment Plan is simply investing a fixed amount regularly (usually monthly) in mutual funds. It's like a recurring deposit but in mutual funds. The beauty of SIP is that you don't need a large amount to start - you can begin with as low as ₹500 per month. Over time, thanks to the power of compounding and rupee cost averaging, your small monthly investments can grow into a significant corpus.
SIP investments qualify for tax deductions under Section 80C up to ₹1.5 lakh if you invest in ELSS (Equity Linked Savings Scheme) funds. This makes SIPs attractive for tax planning too. For FY 2025-26, you can invest in any equity mutual fund or debt fund through SIP, but only ELSS mutual funds give you the 80C tax benefit. However, all SIPs help you build wealth through disciplined investing and compounding returns, typically ranging from 10-15% annually for equity funds over long term.
Our SIP calculator helps you understand how much wealth you can build if you invest a certain amount monthly for a specific period. You can see the effect of different returns and time periods. For example, investing ₹10,000 per month for 20 years at 12% returns can grow to nearly ₹1 crore. If you're planning to use SIPs as part of your tax saving strategy, also use our Section 80C optimizer to maximize tax benefits.
Many people also combine SIP with other investments like PPF and fixed deposits for a balanced portfolio. PPF gives guaranteed returns and tax-free maturity, while FD provides safety but lower returns. SIP in equity funds gives potential for higher returns but with market risk. Together, these help you achieve different financial goals like home purchase, children's education, or retirement planning.
Specify the amount you want to invest monthly in your SIP
Enter the expected annual return rate (typically 10-15% for equity funds)
Select the duration for which you plan to invest (longer periods show better returns)
Click calculate to see your potential returns and investment growth
Pro Tip
SIP investments benefit from rupee cost averaging and compound interest. Start early and stay invested for longer periods to maximize returns.
Systematic Investment Plan (SIP) is an investment strategy where you invest a fixed amount regularly in mutual funds. It helps in disciplined investing and benefits from rupee cost averaging.
SIP investing works best when markets move up and down over time. During market corrections, your SIP buys more units at lower prices. During rising markets, the value of accumulated units increases.
This behavior helps investors avoid emotional decisions like panic selling or waiting endlessly for the perfect time to invest. Over long periods, this disciplined approach has historically delivered stable wealth creation despite short term volatility.
Investors who stayed invested during market downturns often benefited the most when markets recovered. SIP rewards patience, consistency, and time in the market.
SIPs work best when investors remain consistent and patient. Avoid reacting to market noise and focus on long term objectives.
Matching SIP duration and fund type with your goal timeline helps manage risk and improves the chances of achieving your target.
Most mutual funds allow SIP investments starting from ₹500 per month. Some funds may have higher minimum amounts. Check with your fund house for specific requirements.
When markets are high, your fixed SIP amount buys fewer units. When markets are low, the same amount buys more units. Over time, this averages out the cost per unit, reducing the impact of market volatility.
Yes, most fund houses allow you to modify your SIP amount, frequency, or even pause it temporarily. However, there may be certain conditions and procedures to follow. Check with your fund house.
Missing one SIP payment usually doesn't affect your investment. However, missing multiple payments consecutively (typically 3-6 months) may lead to automatic termination of your SIP. Check your fund's specific policy.
No, SIP returns are not guaranteed as they depend on market performance. However, historical data shows that SIPs in equity funds have provided good returns over long periods (5+ years) despite short-term volatility.
Equity SIPs are suitable for long-term goals (5+ years) and higher risk tolerance. Debt SIPs are better for short-term goals and conservative investors. A balanced approach with both can help diversify your portfolio.
Consider factors like fund performance, expense ratio, fund manager's track record, fund house reputation, and your risk profile. Look for consistent performers over different market cycles rather than just recent top performers.
Yes, you can redeem your SIP investments anytime. However, early redemption may attract exit loads (fees) and short-term capital gains tax. It's advisable to stay invested for the planned duration to maximize returns.
SIP involves regular small investments over time, while lump sum is a one-time large investment. SIP reduces timing risk and provides rupee cost averaging benefits, while lump sum can be more profitable if invested at the right time in a bull market.
Review your SIP investments annually or when there are significant changes in your financial goals, risk tolerance, or market conditions. Avoid frequent changes as SIPs work best with long-term discipline and patience.
Yes. SIP is ideal for first time investors because it allows small investments, reduces market timing risk, and builds discipline over time.
Yes. Most fund houses allow step up SIPs where you increase the investment amount annually. This helps align investments with income growth.
SIPs offer higher long term return potential but involve market risk. Recurring deposits offer safety but lower returns. The choice depends on your risk tolerance and investment horizon.
Yes. Volatile markets often improve long term SIP returns because more units are accumulated at lower prices.