📈 SIP Calculator
Calculate your Systematic Investment Plan returns with step-up options
Investment Summary
Understanding SIP & SWP
Learn the fundamentals of systematic investment and withdrawal planning to make informed financial decisions.
What is SIP?
A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly in mutual funds. It's a disciplined approach to building wealth over time through the power of compounding.
How SIP Works:
With SIP, you invest a fixed amount at regular intervals (monthly, quarterly, etc.) in a mutual fund scheme. This approach helps you benefit from rupee cost averaging, where you buy more units when prices are low and fewer units when prices are high.
Key Benefits of SIP:
- Rupee Cost Averaging - Reduces impact of market volatility
- Disciplined investing - Automatic monthly investments
- Power of compounding - Exponential growth over time
- Flexibility - Start with as little as ₹500 per month
- Convenience - Automatic bank deductions
What is SWP?
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount regularly from your mutual fund investments. It's ideal for generating regular income during retirement or achieving financial goals.
How SWP Works:
With SWP, you can withdraw a predetermined amount from your mutual fund investments at regular intervals. This provides a steady income stream while allowing the remaining corpus to continue growing.
Key Benefits of SWP:
- Regular income stream - Predictable cash flow
- Tax efficiency - Only capital gains are taxed
- Flexibility - Choose withdrawal amount and frequency
- Growth potential - Remaining corpus continues to grow
- Liquidity - Access to funds when needed
Frequently Asked Questions
Get answers to common questions about SIP and SWP investments.
Most mutual funds allow SIP investments starting from ₹500 per month. However, some schemes may have higher minimum amounts. The exact minimum investment amount varies between fund houses and specific mutual fund schemes. It's advisable to check with your fund house for specific requirements.
SIP and SWP calculators provide estimates based on the inputs you provide. Actual returns may vary due to market conditions, fund performance, expense ratios, and other factors. These calculations assume a constant rate of return, which rarely happens in real markets. Therefore, calculator results should be used for planning purposes only and not as guarantees of future performance.
Yes, most mutual funds allow you to increase, decrease, pause, or stop your SIP at any time. You can also change the frequency of your investments (e.g., from monthly to quarterly). However, there may be certain conditions and processing times involved. Some funds require you to maintain the SIP for a minimum period before making changes. Always check the specific terms with your fund provider.
SWP can potentially offer higher returns and tax benefits compared to fixed deposits, but it also carries market risks. With SWP, your money remains invested in the market, so it has growth potential even as you withdraw. Fixed deposits offer guaranteed returns but typically lower yields after accounting for inflation. The choice depends on your risk tolerance, income needs, investment timeline, and tax situation. Many retirees use a combination of both for balanced income.
During a market crash, your SIP continues as scheduled, buying more units at lower prices. This is actually beneficial in the long run through rupee cost averaging. When markets recover, these additional units purchased at lower prices can significantly boost your returns. Historically, investors who continued their SIPs through market downturns have achieved better long-term results than those who stopped during volatile periods.
SWP offers potential tax advantages over lump-sum withdrawals. Each SWP withdrawal is considered a partial redemption, with tax calculated based on capital gains. For equity funds, gains from units held over 12 months are taxed at 10% (plus surcharge and cess). For debt funds, gains from units held over 36 months are taxed at 20% with indexation benefits. This is often more tax-efficient than taking large lump-sum withdrawals, which could push you into a higher tax bracket.