What is a SIP?
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund every month. Instead of timing the market, SIP uses rupee cost averaging — buying more units when prices are low and fewer when high — to smooth out volatility over time.
How the SIP Formula Works
The SIP maturity formula is:
M = P × [(1 + r)^n – 1] / r × (1 + r) Where: M = Maturity amount P = Monthly investment r = Monthly rate (annual rate ÷ 12 ÷ 100) n = Total months (years × 12)
SIP Example: ₹5,000/month for 10 Years
Assuming 12% annual returns:
- Monthly SIP: ₹5,000
- Total invested: ₹6,00,000
- Maturity value: ₹11.6 Lakhs
- Wealth gain: ₹5.6 Lakhs (93% more)
That's the power of compounding. Try it yourself with our free SIP Calculator →
How Much SIP to Start With?
Financial advisors recommend investing 20% of your monthly income in SIPs. Here's a quick guide:
- ₹20,000 income → ₹4,000/month SIP
- ₹50,000 income → ₹10,000/month SIP
- ₹1 lakh income → ₹20,000/month SIP
Best SIP Funds in 2026 (by Category)
- Large Cap: Mirae Asset Large Cap, Axis Bluechip
- Mid Cap: Kotak Emerging Equity, HDFC Mid-Cap Opportunities
- ELSS (Tax Saving): Mirae Asset Tax Saver, Canara Robeco ELSS
- Flexi Cap: Parag Parikh Flexi Cap
Note: Past performance ≠ future returns. Always verify with SEBI-registered advisors.
SIP vs Lump Sum: Which is Better?
For most salaried investors, SIP wins because it enforces discipline and removes emotional timing decisions. Lump sum is better only when you have a surplus and markets are clearly undervalued.
Start Calculating Now
Use our free SIP calculator to find the exact monthly amount you need to reach any financial goal. No sign-up, no download required.