SIP Calculator

Calculate how much wealth you can create by investing small amounts regularly.

SIP Calculator

Investment
%
Years

Breakdown

About Mutual Funds

Mutual Funds are investment vehicles that pool money from multiple investors to create a diversified portfolio of stocks, bonds, or other securities, managed by professional fund managers.

Types of Mutual Funds:

  • Equity Funds - Invest in stocks, higher risk & returns
  • Debt Funds - Invest in bonds, lower risk & stable returns
  • Hybrid Funds - Mix of equity & debt, balanced
  • Index Funds - Track market index, passive management
  • ELSS - Tax-saving equity funds, 3-year lock-in

How MF Returns Work

Returns Calculation:

SIP: Use XIRR for accurate returns (accounts for multiple investment dates)

Lumpsum: Use CAGR for annualized returns

Impact of Expense Ratio: 1% higher expense reduces 20-year corpus by 15-20%!

Historical average: Equity funds 12-15%, Debt funds 7-9%, Hybrid 9-11%

Key Insights

💰 SIP Power

₹10K/month SIP for 20 years @ 12% = ₹1 crore accumulated. Power of compounding + rupee cost averaging makes SIP the best wealth creator for salaried individuals!

📊 Expense Ratio Impact

Choosing index fund (0.3% expense) over active fund (2% expense) can increase 30-year corpus by 30-40%. Lower costs compound dramatically!

🎯 Stay Invested

Missing just the 10 best market days over 20 years reduces returns from 12% to 5-6%. Stay invested through volatility!

Did You Know?

📈 Direct Plan Advantage

Direct plans have 0.5-1.5% lower expense ratio than regular plans. On ₹10L invested for 20 years, this difference = ₹5-8 lakhs extra! Buy direct whenever possible.

🏆 Index Fund Success

Over 10+ years, only 20-30% of active funds beat their benchmark index consistently. Index funds guarantee market returns at minimal cost - often the smartest choice!

💡 ELSS Benefits

ELSS has shortest lock-in (3 years) among 80C options, plus potential for 12-15% returns vs 7-7.5% in PPF. Best tax-saving investment for long-term wealth!

Frequently Asked Questions About Mutual Funds

Mutual Funds pool money from multiple investors to invest in diversified portfolios of stocks, bonds, or other securities, managed by professional fund managers. Each investor owns units representing their share of holdings. It's a simple way for individuals to access diversified, professionally managed investments starting from as low as ₹500.
SIP (Systematic Investment Plan) suits regular salary earners - invests fixed amount monthly, benefits from rupee cost averaging, reduces timing risk. Lumpsum suits those with large idle cash - potentially higher returns if market timing is right, but higher risk. For most investors, SIP is better: disciplined, lower risk, can start small. Combine both if possible!
Expense Ratio is annual fees charged by fund (fund management, operations). If fund returns 12% and expense ratio is 2%, net return is 10%. Over 20 years on ₹10L: 2% expense reduces corpus by ₹8-10 lakhs! Index funds have low expense (0.1-0.5%), active funds higher (1.5-2.5%). Choose funds with expense ratio < 1% for equity, < 0.75% for debt.
NAV is the per-unit price of mutual fund. Calculated as: (Total Assets - Total Liabilities) / Number of Units. Updated daily. When you invest ₹10,000 and NAV is ₹100, you get 100 units. NAV alone doesn't indicate fund quality - a ₹10 NAV fund can perform better than ₹500 NAV fund. Focus on returns, not NAV value.
Index Funds: Track market index (Nifty 50, Sensex), low expense ratio (0.1-0.5%), guaranteed market returns, minimal risk of underperformance. Active Funds: Fund manager tries to beat market, higher expense (1.5-2.5%), potential for higher returns BUT 70-80% fail to beat index over 10 years! For long-term passive investors, index funds are usually better.
Equity Funds: Long Term (&gt;1 year) - 10% tax on gains &gt;₹1L/year. Short Term (&lt;1 year) - 15% tax. Debt Funds: Long Term (&gt;3 years) - 20% with indexation benefit. Short Term (&lt;3 years) - Taxed at your income slab. ELSS has 3-year lock-in + 80C benefit (₹1.5L deduction). SIP taxation: each installment treated separately based on holding period.
Redeem when: (1) You achieve your financial goal, (2) Fund consistently underperforms category & benchmark for 2-3 years, (3) Fund manager/strategy changes fundamentally, (4) Rebalancing portfolio for asset allocation, (5) Emergency needs. DON'T redeem for: (1) Short-term market volatility, (2) Negative 1-year returns (equity needs 5+ years), (3) Fear during corrections. Stay invested long-term!
Direct Plans: Buy directly from AMC, no distributor commission, lower expense ratio (0.5-1% less than regular). Regular Plans: Through distributor/advisor, higher expense but you get advice/service. Difference compounds to 20-30% over 20 years! Choose Direct if you can research yourself. Choose Regular if you need hand-holding and are willing to pay for it.