SIP Calculator
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Everything You Need to Know About SIP
Smart SIP Investment Tips
- Start early to benefit from power of compounding - even ₹1,000/month matters
- Choose growth option over dividend for long-term wealth creation
- Increase SIP amount annually by 10-15% with salary increments
- Don't stop SIP during market downturns - you buy more units
- Diversify across large-cap, mid-cap, and small-cap funds
- Review and rebalance portfolio every 6-12 months
- Consider ELSS funds for tax saving under Section 80C
- Maintain emergency fund separately before starting SIP
Understanding SIP
SIP (Systematic Investment Plan) is a disciplined investment approach where you invest a fixed amount regularly in mutual funds.
SIP Returns Formula:
FV = P × [{(1 + r)^n - 1} / r] × (1 + r)
Where FV = Future Value, P = Monthly Investment, r = Monthly Rate, n = Number of Months
Benefits of SIP: Rupee cost averaging, power of compounding, disciplined investing, and flexibility to start/stop anytime.
Frequently Asked Questions
What is the minimum amount to start SIP?
You can start SIP with as low as ₹500 per month in most mutual funds. Some funds even allow ₹100 per month. The key is to start early rather than waiting for a larger amount.
SIP vs Lumpsum - Which is better?
SIP is better for regular income earners as it averages out market volatility. Lumpsum works well if you have surplus funds and can time the market. Ideally, combine both - invest lumpsum during market corrections and continue regular SIP.
Can I modify or stop SIP anytime?
Yes! SIP is completely flexible. You can pause, stop, increase, or decrease the amount anytime. Most funds allow online modifications without any charges. However, ELSS funds have a 3-year lock-in period.
What returns can I expect from SIP?
Historical data shows: Equity funds: 12-15% CAGR over 5+ years, Balanced funds: 10-12%, Debt funds: 7-9%. However, past performance doesn't guarantee future returns. Long-term SIP in equity typically beats inflation significantly.
How is SIP taxed?
Equity funds: STCG (< 1 year): 15%, LTCG (> 1 year): 10% on gains above ₹1 lakh. Debt funds: Taxed as per income slab. ELSS provides tax deduction up to ₹1.5 lakh under 80C but has 3-year lock-in.
Should I continue SIP during market crash?
Absolutely! Market crashes are the best time to accumulate units at lower prices. This is when rupee cost averaging works best. Historical data shows investors who continued SIP during 2008 and 2020 crashes earned exceptional returns.
Complete SIP Investment Guide
Master the art of systematic investing in mutual funds
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