What is SIP and how does it work?+
SIP (Systematic Investment Plan) is a method of investing a fixed amount in mutual funds at regular intervals (usually monthly). Each month your fixed amount buys more units when NAV is low and fewer when NAV is high — this averaging effect is called rupee cost averaging. Over long periods, it can create significant wealth.
What is a realistic SIP return rate in India?+
Historically, large-cap equity mutual funds in India have delivered 10–13% CAGR over 10+ years, while mid-cap funds have given 14–18%. However, past returns don't guarantee future performance. Financial advisors typically use 10–12% as a conservative estimate for planning purposes.
Is SIP better than Fixed Deposit?+
SIP in equity mutual funds generally outperforms FDs over long periods (5+ years). FD gives guaranteed returns (6.5–7.5%), while SIP returns depend on market performance but historically exceed 10–12% p.a. over 10+ years. SIP is best for long-term wealth creation; FD is safer for short-term goals.
What is the minimum SIP amount?+
The minimum SIP amount starts from ₹100–₹500 per month depending on the fund house. Platforms like Groww, Zerodha, Paytm Money allow SIPs from ₹100. Most popular funds allow ₹500/month minimum.
What is XIRR in SIP returns?+
XIRR (Extended Internal Rate of Return) is the actual annualised return on your SIP investments, considering the timing of each cash flow. It gives a more accurate picture of your returns than simple CAGR because each SIP instalment was invested at different times and NAVs.
Can I stop or pause my SIP?+
Yes, you can pause, reduce, increase or stop your SIP at any time without penalty. Pausing is available for 1–6 months. The invested amount remains in the fund and continues to grow. Stopping SIP does not mean your existing investment is withdrawn — it stays invested until you redeem.