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Calculate your Systematic Investment Plan returns
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Explore Courses →What is SIP?
Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly in mutual funds. It allows investors to invest in a disciplined manner without worrying about market volatility.
📊 Benefits of SIP
- ✅ Disciplined investing habit
- ✅ Rupee cost averaging
- ✅ Power of compounding
- ✅ Start with small amounts
- ✅ Flexible investment
💡 SIP Formula
Future Value = P × [{(1 + r)^n - 1} / r] × (1 + r)
- P = Monthly investment amount
- r = Monthly rate of return (annual rate / 12)
- n = Total number of months
Complete Guide to SIP Investment in Nepal
The Power of Compounding Explained
Albert Einstein called compound interest the "eighth wonder of the world." In SIP, you earn returns not just on your principal contribution, but also on the returns generated by that principal. Over time, this snowballs into a massive corpus.
| Year | Inv. Amount | Interest Earned | Total Value |
|---|---|---|---|
| Year 1 | ₹1,20,000 | ₹8,000 | ₹1,28,000 |
| Year 5 | ₹6,00,000 | ₹2,50,000 | ₹8,50,000 |
| Year 20 | ₹24,00,000 | ₹76,00,000 | ₹1,00,00,000 (1 Crore!) |
Top Mutual Funds in Nepal for SIP
Several Capital Merchant Banks offer SIP facilities. Some popular open-ended schemes include:
- NIBL Sahabhagita Fund
- NMB Saral Bachat Fund
- Siddhartha Systematic Inv. Scheme
- NIC Asia Dynamic Debt Fund
SIP vs Lumpsum: Which is Better?
SIP is generally recommended for salaried individuals and beginners because:
- Rupee Cost Averaging: You buy more units when the market is low and fewer when it's high, averaging out the cost.
- Discipline: It enforces a saving habit (e.g., auto-debit on salary day).
- Start Small: You can start with as little as NPR 1,000.
Frequently Asked Questions
Is SIP return guaranteed?
No, SIP returns are linked to the market performance of the underlying assets (stocks/bonds). However, long-term equity mutual funds have historically provided 12-15% returns, beating inflation.
Can I stop my SIP anytime?
Yes, open-ended mutual funds allow you to stop your SIP or redeem your money anytime. However, exit loads (fees) may apply if you withdraw within a certain period (usually 1-2 years).
Frequently Asked Questions
What is the minimum SIP amount in Nepal?
Most mutual funds in Nepal allow SIP investments starting from NPR 500 to NPR 1,000 per month. Check with your fund house for specific requirements.
Is SIP better than lump sum investment?
SIP is ideal for volatile markets as it averages out the purchase cost. Lump sum may work better in a consistently rising market. Both have their advantages.
Can I stop or pause my SIP?
Yes, you can typically pause or stop your SIP without any penalties. Your existing investments continue to grow even after stopping new contributions.