A SIP (Systematic Investment Plan) is a way of investing a fixed amount into a mutual fund every month rather than investing a lump sum at once. This calculator estimates the future value of your monthly SIP investments using compound growth โ each month's contribution grows for a different length of time depending on when it was invested, so the total wealth accumulated is more than simply monthly investment ร number of months.
The 'Amount Invested' figure is just your monthly contribution multiplied by the number of months โ the money you actually put in. 'Estimated Returns' is the extra wealth generated purely from compounding at your expected annual return rate. The gap between these two numbers grows dramatically over longer time periods, which is the core reason SIPs are recommended as a long-term wealth-building tool rather than a short-term one.
No โ mutual fund returns are market-linked and not guaranteed. The percentage you enter is an assumption based on historical averages or your own expectation; actual returns can be higher or lower depending on market performance.
Equity mutual funds in India have historically averaged roughly 10-14% annually over long periods (with significant year-to-year variation), while debt funds are typically lower (6-8%). Use a conservative estimate for planning purposes rather than the best-case historical number.
It has a very minor effect on the final maturity value due to compounding mechanics, but the difference is generally small enough to ignore for planning purposes โ consistency in investing matters far more than the exact date.