Question 1

What is a SIP (Systematic Investment Plan)?

Accepted Answer

A SIP is a disciplined way to invest a fixed amount in a mutual fund every month. It averages out market volatility (rupee-cost averaging) and harnesses compounding over time.

Question 2

What is a Step-Up SIP?

Accepted Answer

A Step-Up SIP automatically increases your monthly contribution by a fixed percentage every year — typically aligned with salary growth. A 10% step-up on a ₹10,000 SIP becomes ₹11,000 in year 2, ₹12,100 in year 3, and so on. It can dramatically boost your final corpus.

Question 3

Can I stop my SIP and still grow my wealth?

Accepted Answer

Yes. Once you stop the SIP, your accumulated corpus continues to compound at the market return. You stop adding fresh money, but the existing investment keeps growing untouched.

Question 4

What happens if I stop SIP after 10 years?

Accepted Answer

Your invested corpus stays invested and keeps compounding for the remaining horizon. If you invest ₹10,000/month for 10 years at 12% and let it grow for another 10 years, the final corpus is significantly larger than what you contributed.

Question 5

How does SWP (Systematic Withdrawal Plan) work?

Accepted Answer

An SWP lets you withdraw a fixed amount every month from your mutual fund corpus. The remaining corpus stays invested and continues to earn returns — useful for generating regular post-retirement income.

Question 6

Can I withdraw monthly income after retirement using SWP?

Accepted Answer

Yes. Many retirees use SWP to draw a salary-like monthly income from accumulated mutual fund corpus while the balance keeps compounding. You can also set an annual SWP increase to beat inflation.

Question 7

Is SIP better than a Fixed Deposit (FD)?

Accepted Answer

Over the long term (7+ years), equity SIPs have historically delivered higher inflation-beating returns than FDs. FDs offer guaranteed but lower returns and lose to inflation. SIPs carry market risk but reward patience.

Question 8

How much SIP is needed to build ₹1 crore?

Accepted Answer

At a 12% expected return, you'd need roughly ₹10,000/month for 20 years, or ₹22,000/month for 15 years, or ₹43,000/month for 10 years. Use the calculator above to fine-tune your numbers.

Question 9

How is SIP taxed in India?

Accepted Answer

Each SIP installment is a separate purchase. Equity fund gains held >12 months are taxed as long-term capital gains (LTCG) at 12.5% above ₹1.25 lakh per financial year. Gains held ≤12 months are short-term (STCG) at 20%.

Question 10

Is SWP taxable?

Accepted Answer

Yes — each SWP withdrawal is treated as a redemption. You pay LTCG or STCG based on how long that portion was held. For long-term equity SWP, this is typically very tax-efficient compared to FD interest.

Question 11

Lump sum vs SIP — which is better?

Accepted Answer

Lump sum works well when markets are low or you have a windfall and a long horizon. SIP works for monthly savers — it removes the need to time the market. Many investors combine both: lump sum for ad-hoc surpluses, SIP for monthly discipline.

Question 12

What return assumption should I use?

Accepted Answer

For diversified equity mutual funds, 11–13% is a reasonable long-term assumption. Use 9–11% for hybrid funds and 6–8% for debt funds. Don't extrapolate from short-term bull-market returns.

Question 13

How does inflation affect my SIP target?

Accepted Answer

₹1 crore today won't buy what ₹1 crore can buy in 20 years. Use the inflation-adjusted toggle to see your corpus in today's purchasing power. Most planners assume 6% long-term inflation in India.

Question 14

Can SWP outlast my corpus?

Accepted Answer

Only if your withdrawal rate is lower than your portfolio return. A common safe rule is to withdraw 4–6% of corpus annually. The calculator will warn you if your SWP rate is likely to deplete the corpus early.

Question 15

Should I keep increasing my SIP every year?

Accepted Answer

Yes — an annual step-up matching your salary hike (typically 8–12%) is one of the highest-impact things you can do. It compounds salary growth into wealth growth without feeling like a sacrifice.

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Advanced SIP Calculator with Step-Up, Lump Sum & SWP