What is SIP and how does it work?

SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds. Every month, a set amount is auto-debited and used to buy mutual fund units at current NAV. Over time, you get both rupee cost averaging and compounding benefits.

How much should I invest in SIP per month?

A simple rule: invest at least 20% of your monthly income in SIP. For ₹50,000 salary, start with ₹10,000/month in diversified equity funds. Even ₹500/month is enough to start. Increase by 10% every year (Step-Up SIP).

What is the expected return from SIP in India?

Historical returns: Large-cap equity funds average 10-12% annually over 10+ years. Mid-cap funds average 12-15%. Index funds (Nifty 50) average 12%. Debt funds average 6-8%. Past returns don't guarantee future returns.

SIP Calculator

Calculate the future value of your monthly SIP investments in mutual funds. See how much wealth you can build over time.

Monthly SIP Amount (₹)

₹5,000

Expected Annual Return (%)

12%

Time Period (Years)

10 Yrs

What is SIP?

SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly (monthly) in mutual funds. It helps you invest in a disciplined manner and benefit from the power of compounding and rupee cost averaging.

Power of Compounding in SIP

Investing ₹5,000/month for 20 years at 12% returns gives you approximately ₹49.5 Lakhs, while your total investment is only ₹12 Lakhs. The remaining ₹37.5 Lakhs is pure wealth created by compounding!

SIP vs Lump Sum

SIP is better for regular investors as it averages out market volatility. Lump sum is good if you have a large amount and the market is at a low. For salaried individuals, SIP is always recommended.

🏦 Start SIP — Compare Top Investment Apps India

📈

Groww

SIP from ₹100 · 1 crore+ investors · Zero commission

Start SIP on Groww →

🚀

Upstox

Free demat · Direct mutual funds · Award-winning app

Start SIP on Upstox →

⚡

Zerodha Coin

Direct MF · Zero commission · Most trusted broker

Start SIP on Zerodha →

All platforms offer direct mutual funds with zero commission. Choose based on your preference.

Frequently Asked Questions

How much SIP to invest for ₹1 crore? ▼

To accumulate ₹1 crore: at 12% return for 15 years = ₹20,000/month SIP. For 20 years = ₹10,000/month. For 10 years = ₹43,000/month. The earlier you start, the less you need to invest monthly thanks to compounding.

Is SIP safe? ▼

SIP in mutual funds is market-linked and not guaranteed. However, regular SIP over 7+ years in diversified equity funds has historically been safe with positive returns. SIP reduces risk through rupee cost averaging — buying more units when prices fall, fewer when prices rise.

What happens if I miss a SIP installment? ▼

Missing one SIP installment is not a big deal — your bank account is debited automatically, and if funds are insufficient, that month's installment is skipped. Your investments continue normally next month. No penalty, no account closure. Consistent investing matters more than individual months.

SIP Calculator India 2026 — How to Build Wealth Monthly

A Systematic Investment Plan (SIP) allows you to invest a fixed amount in mutual funds every month. SIP is India's most popular investment method — over ₹20,000 crore invested monthly through SIPs in 2026. The power of SIP lies in rupee cost averaging: you buy more units when markets are low and fewer when markets are high, reducing your average cost over time. Starting a SIP of just ₹500/month in an ELSS fund can build tax-free wealth over 10-15 years.

SIP Returns — Power of Compounding with Real Examples

₹5,000/month SIP at 12% CAGR for 10 years = ₹11.6 lakh (invested ₹6L, profit ₹5.6L). For 15 years = ₹25.2 lakh. For 20 years = ₹49.9 lakh (10× your investment!). At 15% CAGR (mid-cap funds): 20-year SIP of ₹5,000/month = ₹76 lakh. The longer the horizon, the more compounding works for you — this is why starting at 25 vs 35 can mean ₹40-50 lakh extra at retirement.

SIP vs Lumpsum — Which is Better in 2026?

SIP wins when markets are uncertain or at high valuations — it removes timing risk. Lumpsum wins when markets have just crashed significantly. For regular salaried investors, SIP is almost always better because: (1) it forces savings discipline, (2) eliminates the need to time the market, (3) averages out purchase cost during volatile periods. Data shows that 10+ year SIPs in diversified equity funds have NEVER given negative returns historically in India.

Frequently Asked Questions

What is the minimum SIP amount?▼

₹500/month is the minimum SIP for most mutual funds. Some funds allow ₹100/month. Platforms like Groww, Zerodha Coin, and Paytm Money allow SIPs with zero transaction charges. You can increase, pause, or stop SIP anytime without penalty.

Is SIP better than FD?▼

For 10+ year horizon: SIP in equity funds (12-15% historical) significantly beats FD (7-7.5%). For under 3 years: FD is safer since equity markets can be volatile short-term. SIP in ELSS also saves tax under 80C, unlike FD interest which is fully taxable.

How to stop SIP?▼

Log into your mutual fund app (Groww, Zerodha, etc.), go to your SIP, and click "Cancel SIP." Your existing units remain invested and continue to grow. No penalty for cancellation. The units can be redeemed after the lock-in period (3 years for ELSS, no lock-in for other funds).