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.

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.

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.

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.

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.

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.

Folio 17 · SIP Calculator

SIP Calculator

Reviewed by Jay Patel· Last reviewed: 25 Apr 2026stale

Jay Patel

Co-Founder & Chief Loan Advisor

Plan your SIP investments and see projected returns.

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.

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