SIP Calculator

Systematic Investment Plans (SIPs) have transformed personal finance for Nepal's growing middle class. With mutual fund investment surging through platforms like CDSC and Mero Share, understanding the mathematics of compounding is essential for building long-term wealth.

The power of compounding in SIPs

An SIP invests a fixed amount every month. Each month's investment earns returns from the day it's invested. The magic is that earlier investments compound longer. A Rs. 5,000/month investment started at age 25 accumulates dramatically more than the same amount started at 35 — not because of more money invested, but because of more time compounding.

SIP calculation formula

FV = P × ((1+r)^n - 1) / r × (1+r)

Where: - FV = Future Value (corpus) - P = Monthly investment amount - r = Monthly return rate = Annual return ÷ 12 ÷ 100 - n = Total number of months

Realistic return expectations for Nepal

Nepal's mutual funds have delivered varied returns. Equity funds have historically returned 8–20% in bull years and negative in bear years. The Nepse index has been volatile. For SIP projections:

- Conservative: 8% per annum - Moderate: 10–12% per annum - Optimistic: 15%+ per annum

Do not use more than 12% as your projection baseline unless you have a specific historical basis.

Rupee-cost averaging

The key advantage of SIPs over lump-sum investment is rupee-cost averaging. When markets are down, your fixed monthly amount buys more units. When markets are up, it buys fewer. Over time, this averages out your cost per unit and reduces the risk of investing at a market peak.