SIP Calculator

Calculate the future value of your Systematic Investment Plan (SIP) or Lumpsum investment and see the power of compounding.

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SIP Calculator – The Power of Compounding

Systematic Investment Plan (SIP) is a method of investing in mutual funds where you invest a fixed amount periodically (monthly, quarterly, etc.). It helps in instilling financial discipline and averaging out the cost of investment (Rupee Cost Averaging).

Luftle's SIP Calculator helps you estimate how much wealth you can create by investing a small amount regularly over a long period. Toggle to "Lumpsum" if you plan to make a one-time investment.

Why Choose SIP over Lumpsum?

  • • Discipline: Automates your savings, ensuring you invest before you spend.
  • • Rupee Cost Averaging: You buy more units when markets are low and fewer when high, averaging your cost.
  • • Flexibility: You can start with as little as ₹500/month.
  • • Compounding: Reinvesting returns leads to exponential growth over 10-20 years.

How is SIP Return Calculated?

We use the standard Future Value of Annuity formula for SIP calculations:

FV = P × [ (1 + i)^n - 1 ] / i × (1 + i)

  • P: Monthly Investment Amount.
  • i: Periodic Rate of Interest (Annual Rate / 12 / 100).
  • n: Total number of months (Years × 12).
  • FV: Future Value (Maturity Amount).

Investing FAQs

What is a good expected return rate?

Historically, Equity Mutual Funds in India have delivered 12% - 15% returns over the long term (10+ years). Debt funds usually offer 7% - 9%.

Can I increase my SIP amount later?

Yes, this is called a "Step-up SIP". You can instruct the fund house to increase your SIP amount by a fixed percentage or amount every year.

Is SIP tax-free?

If you invest in ELSS (Equity Linked Savings Scheme) funds, you get tax deduction under 80C. However, gains from equity funds exceeding ₹1.25 Lakh in a year are taxed at 12.5% (LTCG).