1. What is SIP Mutual Fund Calculator?

The SIP (Systematic Investment Plan) Mutual Fund Calculator helps investors estimate the future value of their regular monthly investments in mutual funds. It uses the power of compounding to project potential returns over a specified investment period.

2. How Does the Calculator Work?

The calculator uses the SIP future value formula:

Where:

• \( P \) — Monthly investment amount (INR)
• \( r \) — Monthly rate of return (annual return ÷ 12)
• \( n \) — Total number of months (years × 12)

Explanation: The formula accounts for compound interest on regular monthly investments, where each installment grows at the specified rate for the remaining period.

3. Importance of SIP Planning

Details: Proper SIP planning helps investors set realistic financial goals, understand the power of compounding, and make informed investment decisions for long-term wealth creation.

4. Using the Calculator

Tips: Enter monthly investment in INR, expected annual return percentage, and investment period in years. All values must be positive and realistic for accurate projections.

5. Frequently Asked Questions (FAQ)

Q1: What is the advantage of SIP over lump sum investment?
A: SIP helps in rupee cost averaging, reduces market timing risk, and makes investing more disciplined and affordable.

Q2: Are the returns guaranteed?
A: No, mutual fund returns are market-linked and not guaranteed. The calculator provides estimates based on assumed returns.

Q3: What is a realistic annual return expectation?
A: Equity mutual funds historically have delivered 10-15% annual returns, but this varies based on market conditions and fund performance.

Q4: Can I change my SIP amount later?
A: Yes, most mutual funds allow you to increase, decrease, or pause your SIP investments as per your financial situation.

Q5: Are there tax benefits on SIP investments?
A: ELSS (Equity Linked Savings Scheme) mutual funds offer tax benefits under Section 80C of Income Tax Act with a 3-year lock-in period.