What is SIP?
A Systematic Investment Plan lets you invest a fixed amount every month in mutual funds, using rupee cost averaging to reduce market timing risk.
Power of Compounding
Investing ₹5,000/month at 12% CAGR for 25 years gives ₹94.9 lakhs from just ₹15 lakhs invested!
Step-Up SIP Strategy
Increasing SIP by 10% annually: starting at ₹5,000/month for 20 years gives ₹1.01 crore vs ₹49.9 lakhs for flat SIP.
SIP vs Lumpsum
SIP reduces risk through rupee-cost averaging. In volatile markets, SIP outperforms lumpsum. For most retail investors, SIP is the safer choice.
Best Fund Types for SIP
- Index funds — low cost, market returns
- Large-cap — stability with moderate growth
- ELSS — SIP + tax saving under 80C
- Small-cap — high risk, high reward for 10+ year horizon
Tax on SIP Returns
Equity STCG (before 1 year) taxed at 15%. LTCG above ₹1.25 lakh taxed at 12.5%. Debt fund gains taxed at slab rate.