⚠️ Mutual fund returns are not guaranteed. Past performance does not indicate future results. Use 10% for conservative planning, 12% for moderate. Never assume above 15% for long-term plans. Consult a SEBI-registered investment advisor.
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SIP Formula & Return Rate Guide
FV = P × ((1 + r)^n − 1) ÷ r × (1 + r)
P = Monthly SIP | r = Annual return ÷ 1200 | n = Months
Verified: ₹5,000/month at 12% for 10 years → FV = ₹11,61,695. Invested = ₹6,00,000. Returns = ₹5,61,695.
Return Rate Reference
Fund Category
Historical Return
Risk
Large-cap equity
10–12% p.a.
Medium
Flexi/multi-cap
11–14% p.a.
Medium
Mid-cap equity
13–16% p.a.
High
Small-cap equity
15–18% p.a.
Very High
Debt / liquid
6–8% p.a.
Low
Index fund (Nifty 50)
~12% long-term
Medium
Frequently Asked Questions
Future value = ₹11,61,695. Total invested = ₹6,00,000. Returns = ₹5,61,695 (93% gain). After 10 years, returns nearly equal the amount you invested — this is the compounding effect.
Future value ≈ ₹99.9 lakhs (nearly ₹1 crore). Total invested = ₹24 lakhs. Returns ≈ ₹75.9 lakhs — 3x the invested amount. This is the dramatic power of compounding over 20 years.
12% is the commonly used planning benchmark based on historical Nifty 50 data over 15–20 year periods. Actual returns vary by fund and market conditions. Use 10% for conservative projections, 12% for moderate. Never assume above 15% for long-term planning.
A step-up SIP increases your monthly amount by a fixed % every year (typically 10%). Starting ₹10,000 with 10% step-up: Year 2 = ₹11,000, Year 3 = ₹12,100 etc. This mirrors salary growth and can add ₹20–50 lakhs to your final corpus vs a flat SIP.
SIP is better for salaried individuals investing from monthly income. It reduces timing risk via rupee cost averaging — when markets fall, your fixed amount buys more units. Lump sum can outperform in a consistently rising market if timed well. For most people, SIP is practical and sustainable.