Question 1

How is SIP return calculated in mutual funds?

Accepted Answer

SIP returns are calculated using the compound interest formula for monthly annuity: M = P x [((1 + i)^n - 1) / i] x (1 + i), where P is monthly investment, i is monthly return rate, and n is total number of months.

Question 2

What is a good expected return rate for equity mutual fund SIP in India?

Accepted Answer

Historically, diversified equity mutual funds in India have delivered average long-term CAGR returns between 12% and 15% per annum over 10+ year horizons.

Question 3

Can I increase my SIP amount every year?

Accepted Answer

Yes! Step-Up SIP (Top-Up SIP) allows you to automatically increase your monthly investment by a fixed amount or percentage every year to match salary increments.