Investments

SIP vs lumpsum — what changes

A 15-year SIP of ₹10,000/month at 12% expected return builds a corpus of roughly ₹50 lakh, of which ₹18 lakh is contribution and ₹32 lakh is growth. The same ₹18 lakh deployed as a lumpsum at the start of year one grows to about ₹99 lakh over the same 15 years at 12%. Lumpsum wins on raw math when markets are kind. SIP wins on behaviour: it removes the timing decision, which is the single most expensive call most retail investors make.

The 12% number — what it actually is

The 12% return assumption everyone quotes is roughly the 20-year Nifty TRI CAGR. It's a long-run average, not a forecast. Individual 5-year windows can deliver anywhere from -5% to 25% per year. Treat the calculator output as a planning estimate, not a promise. Run the same calculation at 2% lower (~10%) to see the worst-realistic case; if the goal still looks achievable, it's a realistic goal.

Tax on equity mutual fund returns (FY26)

Post the 23-July-2024 budget rules, long-term capital gains on equity mutual funds (units held over one year) are taxed at 12.5% on gains above ₹1.25 lakh per financial year. Short-term (under one year) is 20%. Debt mutual funds bought after 1-April-2023 are taxed at slab rate on the whole gain under Section 50AA, with no LTCG benefit and no indexation, regardless of holding period. The SIP and lumpsum calculators both compute the post-tax estimate assuming equity LTCG treatment and a single-FY redemption — spreading redemptions across financial years uses fresh ₹1.25 lakh exemption each year and lowers the tax bite.

Where to actually open an account

Always direct plan. Coin by Zerodha, Groww, Kuvera, MF Central, and AMC websites all let you buy direct. The 0.5-1.2% expense-ratio gap between direct and regular plans compounds into a 15-20% smaller corpus over 25 years — sizeable enough that nothing else in the fund choice matters as much. The savings side of the suite covers the guaranteed-return alternatives, including PPF and FD.