What is a SIP?
A Systematic Investment Plan lets you invest a fixed amount in a mutual fund every month. It automates investing, enforces discipline, and averages out market volatility through rupee cost averaging.
SIPs are the most popular way to invest in mutual funds in India — you can start with as little as ₹500 a month and increase the amount as your income grows.
How SIP Returns Work
Each monthly installment buys units at that month's NAV. Over time, your average purchase cost smooths out, and the entire accumulated corpus compounds. Equity mutual funds have historically delivered around 10–14% annualized returns over long periods.
For example, investing ₹10,000 per month for 20 years at 12% annualized growth builds a corpus of roughly ₹99.9 lakh — of which only ₹24 lakh is your own money. The rest is compounding doing the heavy lifting.
Goal-Based SIP Planning
Start with the goal amount and work backwards. For a ₹50 lakh retirement top-up in 15 years at 12%, you need about ₹10,000 per month. For a ₹20 lakh child education fund in 10 years, about ₹8,700 per month.
Be realistic about returns: use 10–12% for equity SIPs and 6–7% for debt-oriented funds. Overestimating returns is the most common planning mistake.
Start Early, Start Small
The biggest advantage in SIP investing is time. Starting 5 years earlier can reduce your required monthly amount by nearly half for the same goal, because compounding gets more years to work.
Use our SIP calculator to find the monthly amount you need for any goal, and see how a small increase in your monthly SIP dramatically changes the final corpus.