Is SIP better than lump-sum?
SIP smooths out volatility via dollar-cost averaging and requires no market timing. Lump-sum edges out SIP in strongly rising markets — historically ~2/3 of the time.
Calculate your SIP returns, total wealth gained, and compare lump sum vs systematic investment plans. Free SIP calculator with growth charts.
Future Value = P × ((1 + r)^n − 1) / r × (1 + r), where P = monthly investment, r = monthly rate, n = months.
$500/month for 20 years at 12% annual (1% monthly) compounds to about $499,574 — of which only $120,000 is your contribution.
SIP smooths out volatility via dollar-cost averaging and requires no market timing. Lump-sum edges out SIP in strongly rising markets — historically ~2/3 of the time.
Long-term equity averages 10–12% in emerging markets and 7–10% in developed markets. Use 10% as a reasonable base case.
Yes — SIPs have no lock-in beyond ELSS's 3 years. You can pause, modify, or stop at any time.
A SIP that auto-increases by a fixed % each year (e.g. +10%). It matches salary growth and dramatically boosts the final corpus.
Yes. Equity funds: 10% LTCG above ₹1L after 1 year. Debt funds: taxed at slab rate since April 2023.
12% is the long-run average for Indian equity (Nifty 50 total return ~12–13% over 20 years). For US equity assume 8–10%. Any single 5-year window can be much lower — stress-test with 8% as well.
Compute each year's SIP future value separately with that year's contribution, then compound the running corpus at the same rate. A $500/month SIP stepped up 10% annually at 12% for 20 years grows to ~$920,000 vs ~$500,000 for a flat SIP.
Most don't. Deduct the expense ratio (typically 0.5–1.5%) from your assumed return before entering it. Apply LTCG tax (10% above ₹1L for equity in India, 15–20% for long-term gains in the US) to the final gain, not the corpus.
Use =FV(rate, nper, -pmt, 0, 1). rate = annual return ÷ 12, nper = months, pmt = monthly SIP, type = 1 (contributions at start of period). Example: =FV(12%/12, 240, -500, 0, 1) ≈ $499,574.
At 12% expected return, you need roughly ₹20,000/month. At 10%, ~₹24,000/month. Use the calculator to solve for the exact monthly SIP against your target and time horizon.