What makes this calculator different
We compute the SIP corpus with the exact future-value-of-annuity formula used by AMCs (no rule-of-thumb approximation) and show the wealth gain split — invested principal vs return earned — to make the compounding effect visible across 5/10/20-year tenures.
Common Questions
SIP Calculator FAQs
Common questions about the SIP Calculator and how to read its results.
Q01
What is a SIP and how does it differ from a lumpsum investment?
SIP (Systematic Investment Plan) commits a fixed monthly amount to a mutual fund. Lumpsum invests one large amount at one date. SIP averages out the unit price across market cycles, lowering timing risk; lumpsum benefits when the market trends up after entry.
Q02
What rate of return should I assume for an Indian equity SIP?
12% per annum is the conservative long-term Indian equity benchmark (NIFTY 50 since inception). For balanced / hybrid funds use 10%; for debt SIPs use 6–7%. Use realistic numbers — the calculator highlights the corpus delta when you flex the rate.
Q03
How is the SIP corpus calculated?
Future value of an annuity: FV = P × ((1 + r)^n − 1) / r × (1 + r), where P is the monthly investment, r is the monthly rate (annual ÷ 12), and n is the number of months. Money Matrix Hub uses this exact formula — no shortcuts.
Q04
Are SIP returns tax-free?
No. Equity-oriented SIPs attract 12.5% LTCG above Rs 1.25 lakh per year (post 2024 budget) if held >12 months; 20% STCG if held <12 months. Debt SIP gains are taxed at slab rate. ELSS SIPs offer Section 80C deduction up to Rs 1.5 lakh.
Q05
Can I step up my SIP every year?
Yes — most fund houses offer a Step-Up SIP feature where the amount auto-increases by a fixed percentage every 12 months. A 10% step-up SIP grows the corpus by 35–50% more than a flat SIP over 20+ years.
Q06
What if I miss a SIP instalment?
No penalty; the SIP simply doesn't deduct for that month. Most platforms allow you to pause and resume. Repeated misses may trigger SIP cancellation by the AMC, requiring a fresh mandate.
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