1. What is Monthly SIP?

A Systematic Investment Plan (SIP) is an investment method where you invest a fixed amount regularly (monthly in this case) in mutual funds. It helps in rupee cost averaging and compounding returns over time.

2. How Does the Calculator Work?

The calculator uses the SIP future value formula:

Where:

• \( FV \) — Future Value of investment
• \( SIP \) — Monthly investment amount (USD)
• \( r \) — Monthly rate of return (annual rate ÷ 12)
• \( n \) — Total number of months (years × 12)

Explanation: The formula accounts for monthly compounding of returns on your regular investments.

3. Importance of SIP Calculation

Details: Calculating potential returns helps in financial planning, setting realistic goals, and understanding the power of compounding in long-term investments.

4. Using the Calculator

Tips: Enter monthly SIP amount in USD, expected annual return rate (%), and investment duration in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the advantage of SIP over lump sum investment?
A: SIP reduces market timing risk through rupee cost averaging and makes investing more disciplined.

Q2: Are the returns guaranteed?
A: No, mutual fund returns are market-linked. The calculator provides projected returns based on your inputs.

Q3: How often should I review my SIP investments?
A: Regular (annual) reviews are recommended, but avoid frequent changes based on short-term market movements.

Q4: What if I increase my SIP amount over time?
A: Increasing SIP amounts can significantly boost returns due to compounding. This calculator assumes fixed SIP amounts.

Q5: How does taxation affect SIP returns?
A: Tax treatment depends on fund type and holding period. Consult a tax advisor for your specific situation.