1. What is Mutual Funds SIP Investment?

Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly in mutual funds. It helps in rupee cost averaging and disciplined wealth creation over the long term.

2. How Does the Calculator Work?

The calculator uses the Future Value of SIP formula:

Where:

• \( FV \) — Future Value of investment
• \( P \) — Monthly investment amount
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Number of investment periods (months)

Explanation: This formula calculates the future value of a series of equal monthly investments earning compound interest.

3. Importance of SIP Investment Planning

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

4. Using the Calculator

Tips: Enter monthly investment amount, expected monthly return rate (as percentage), and investment duration in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the advantage of SIP over lump sum investment?
A: SIP reduces the impact of market volatility through rupee cost averaging and promotes disciplined investing habits.

Q2: How is the monthly interest rate calculated?
A: If you have an annual return expectation, divide it by 12 to get the monthly rate. For example, 12% annual = 1% monthly.

Q3: Can I change my SIP amount during the investment period?
A: Most mutual funds allow you to increase your SIP amount, but decreases may have restrictions. Check with your fund house.

Q4: Are SIP returns guaranteed?
A: No, SIP returns are market-linked and not guaranteed. The calculator provides an estimate based on assumed returns.

Q5: What factors affect SIP returns?
A: Market performance, fund selection, investment duration, expense ratio, and economic conditions all impact final returns.