What is the Current Interest Rate on SIP

SIP is a feature of mutual fund, which allows investors to invest money in small amounts in regular intervals. SIP returns for various mutual funds may vary. On an average, for large cap equities, a return of 12-18% can be expected whereas from mid-cap equities, a return of 14-17% is expected. However, in case of a long-term debt-based mutual fund, one can expect a return of 6 – 9 % p.a.

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As SIP allows investors to invest small amounts of money systematically instead of a lump sum, the investment can be done on a weekly, monthly and quarterly basis. Depending on the Net asset Value (NAV) of the funds, the numbers of units are allocated to the investors. 

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

How to Calculate Return Rate on SIP

SIP is a well-disciplined way to invest and create wealth for future. Since investments are done in intervals, the impact of market volatility reduces automatically. So, in order to know how a particular fund is performing in the market, one can calculate return on SIP mutual fund.

However, there is fixed SIP interest rate as investments are made in market-linked instruments whose rate of return fluctuates from time to time. With the help of an SIP calculator, one can calculate the wealth gained or the return from the monthly SIP investments. 

In order to evaluate the performance of SIP scheme, there are different ways by which the investors can calculate return on their investments. Further in this article, we have described some of the ways through which you can calculate return rates in SIP.

Absolute Return or Point to Point Return

Absolute return or point to point return helps to calculate the simple return on the initial investment. In order to calculate the absolute return of the investment, one just needs the current and the initial or the ending Net Asset Value of the scheme. The absolute return can be calculated as well. For example, let’s say the initial Net Asset Value of the fund you invested in is Rs.20 and after 3 years, it is Rs.40, the absolute return comes to 100%.

Absolute return= (Current NAV – Initial NAV)/ Initial NAV X 100

This formula can be used to calculate returns when the holding period is less than 12 months.

Simple Annualized Return- This helps to annualize the return generates in case of less than 12 months of holding period. Simple annualized return can also be termed as effective annual yield. For annualizing the return generated one can use this formula.

((1+ Absolute Rate of Return) ^ (365/Number of Days)) — 1

For example:- Let’s assume the Net Asset Value of Rs20 increases up to Rs.25 in 7 months i.e.210 days. In this case the absolute return is 25% over 7 months.

So, it can be calculated as:

= ((1+ 0.25) ^ (365/210)-1

= 47.38%

Therefore, absolute return as mandated by Security and Exchange Broad of India (SEBI) is calculated in case of the period less than 1 year and in case the period is exactly 1 year, then simple annualized return is shown.

Compounded Annual Growth Rate (CAGR)

 In case, the time period is more than 1 year then compounded annual growth rate is a much better way to calculate returns. CAGR is basically a number that depicts the growth of investment and how it had generated a steady return. However, in reality the returns may vary from year to year. Therefore, CAGR shows a mean annual growth rate that equalizes out the volatility in return over a period of time.

Compound Annual Growth Rate can be quickly computed using this formula

= (ending- value/ beginning- value)^ (1/number of years)-1*100

In case the holding period is more than one month, then one can use the below mentioned formula to calculate compound annual growth rate.

= (ending – Value/beginning-value) ^ (12/ number of months) — 1*100

Similarly, if you have both net asset value (NAV) of your fund and the number of days, then you can use the formula

= (ending-value/beginning-value) ^ (365/number of days) – 1*100 

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Use XIRR, for Calculating SIP Return- As the SIP interest rates are flexible, the cash outflow and inflow can vary because of irregular intervals and cannot be evenly matched. Through XIRR, one can calculate the internal return rate as well as annualized growth rate for a scheduled cash flow that occurs at irregular intervals.  

As mentioned above, one needs to keep investing in SIP at regular intervals for as long as he/she wants. Long-term investment will be beneficial with the maturity amount upon exit. Depending upon the net asset value of the scheme, the date of SIP is pre-decided and even the amount is also fixed. Under SIP scheme, the investors get certain number of units. Hence, from the day SIP starts, the investors keep accumulating the units till the date of exit.  The total unit is redeemed as the maturity amount, which is also known as the net asset value (NAV) multiplied by total units.

One can use XIRR to calculate the total return one scheme has generated. In order, to calculate XIRR all you need is

  • SIP amount
  • Dates of SIP investments
  • Date of redemption
  • Maturity amount.


As compared to the lump-sum investment, SIP is more beneficial as the amount is invested in a monthly basis, so there is very less or no negative impact of market volatility. Moreover, SIP funds provide flexibility to the investors as one can create, update or cancel SIP anytime. By comparing the changing SIP return rates, you can choose the most beneficial scheme according to your own choice.

You may also like to read: SIP Returns & Relation to Share Markets

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What is the Current Interest Rate on SIP Reviews & Ratings

4.3 / 5 (Based on 25 Reviews)
(Showing Newest 25 reviews)
Ooty, September 02, 2020
Start with minimum amount
I have recently got the SIP plan from the policybazaar and it is really easy to get the plan from the online market. Not only this you can also start from the minimum amount of Rs. 500. It is very much convenient in nature and I really love my plan. Thank you policybazaar.
Kohima, September 02, 2020
Great assistance
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Yamunanagar, September 01, 2020
Long term and beneficial
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Bhilaad, September 01, 2020
Investment plan
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Islampur, May 25, 2020
Online process
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East Midnapore, May 23, 2020
Long term gains
It is the process of long term gain and to sustain our future from certain hurdles. As the things have become expensive and we should save money. So, these investments plans helps in saving money.
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Great support system
I love the services of policybazaar and the employees working there. It’s really nice that they gave me a lot many choices related to the investment plans. Unique way to invest.
Mansur, May 21, 2020
Choices are given
While you are planning to take the SIP from policybazaar. You can have a lot many choices to choose out of different investment plans. I got the best one and I like it.
R.g.pur, May 11, 2020
A call away
I am happy that I bought my SIP plan from policybazaar. As they are just a call away. I was having a problem with my SIP and they resolved in few minutes.
Sialhawk, May 10, 2020
I can see that SIP are flexible in nature. We can choose any kind of Mutual fund and also the amount which we have to invest. Quite simple.
Vizianagaram, May 10, 2020
Helps in financial way
It helps me in dealing with financial things. As nowadays everything has become too costly. But with the help of SIP I can manage with my finances and can save money every month for a long term investment.
Dabhoda, May 09, 2020
Good customer service
The customer service team of policybazaar is very nice. I was in a doubt before buying a SIP plan, but with the help of them I got to know about a best plan which is according to my budget.
Adimali, May 07, 2020
Best Returns
I recently purchased the SIP plan for me and for my wife. I found it totally good and apt for us. It is a long term investments with great number of benefits. Thank you team policybazaar for such nice plan.
Agalpur, April 08, 2020
One stop and best plans
I got the SIP plan with the help of policybazaar. It is one stop solution. With great returns and monthly plan I am very satisfied. If so ever I need help from the customer care team they are available to help me.
Zotlang, April 06, 2020
Great Returns
It is a great source of return. I have started doing it from last 2 years and I am feeling relaxed that after a certain age I would be having a good amount of money with better returns.
Agra, April 03, 2020
Good policy
SIP plan is quite trending and useful nowadays. It has reflected a great impact on our society. As people are more concern about future planning and saving the money. Even the SIP plans gives us good returns after a certain period of time.
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Good customer care
The customer care team is quite helpful and nice. I got full and accurate information from them. They are not so disturbing. They have a good knowledge related to the product.
Ahmedpur, March 27, 2020
Easy to get plan
It is easy to get the plan. I just visited the website of policybazaar. And I got various plans. Then I called the customer care team and they explained me about each and every plan. I chose the best one.
Ahmedpur, March 23, 2020
Good plans
I visited the website of policybazaar and found good number of plans for future savings and investments. SIP is very important for everyone who wants a good satisfaction and more savings in his or her life. I would love to recommend all these plans to my friends and family.
Jatga, January 20, 2020
Reach Your Goals
After a certain period of time you can reach your goal. I have seen that higher you invest there will be higher risk but you can earn well. But lower the investment low risk and low returns. Well, I have started with a less amount so that I can check and analyse. But gradually after sometime I will get a good amount. Thanks policybazaar.
Pathankot, January 13, 2020
Earn Money on your Investment
It is a good way to invest money and you can earn benefits and profits in your money only. A convenient way to invest and utilise your amount. Initially I found it little bit confusing but after a while everything is being okay. People who are planning in a long term investments can do such things.
Satlasana, January 08, 2020
Systematic Investment Plan
It is a good plan. My friend recommended me to get this plan so that I can invest some amount of money into this. Ultimately I will gain benefits after a certain period of time. It is a good plan by policybazaar and I would recommend to everyone.
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Systematic way for making money
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Ara, December 26, 2019
Good Returns In Long Term
I feel that while investing into this plan I have gained knowledge regarding the same. Also, after a certain good investment I will get the good returns. Though it is long term process but surely will be good for my future. Thank you team policybazaar.
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