FID Answers: SIP of 5000 for 10 years at 12%

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You asked SIP of 5000 for 10 years at 12%

Worked out with the SIP Calculator

Total invested₹6,00,000

Estimated gains₹5,61,695

Estimated value₹11,61,695

Your numbers: Monthly investment: ₹5,000 · Expected return (per year): 12% · Time period: 10 years

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What is a SIP?

A systematic investment plan (SIP) invests a fixed amount in a mutual fund every month. You buy more units when prices are low and fewer when they are high, and the habit matters more than timing the market.

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Is a step-up SIP a separate product?Many fund houses let you add a yearly top-up to an existing SIP mandate. You can also do it manually by starting an additional SIP each year. The maths is the same either way.
Can I use this for SIP investments?Not accurately. A SIP has many purchase dates, so CAGR on the total would understate the return. Use XIRR for SIPs; FID will add an XIRR calculator.
Why not use CAGR for SIPs?CAGR assumes all money went in on one date. In a SIP, later instalments have been invested for less time, so CAGR on the total understates the return. XIRR accounts for each date.

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What is a SIP?

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