Illustration only. Equity returns are not guaranteed and do not arrive in a straight line. Tax: the projection is pre-tax, and each holding is taxed differently on withdrawal — EPF and PPF are fully tax-free (EPF needs 5 years of service; EPF interest on your own contributions above ₹2.5L/yr is taxable yearly); NPS is tax-free for the 60% lump sum at exit, with the remaining 40% buying an annuity whose pension is taxed at slab; equity funds pay 12.5% LTCG beyond ₹1.25L of gains per year; debt funds and FDs are taxed at your slab. Weigh the mix accordingly when comparing against a target. Start a SIP →
What is CAGR and how is it different from average return?
CAGR (Compound Annual Growth Rate) is the single steady annual rate that would take your starting value to your ending value over the period, accounting for compounding. A simple average of yearly returns can be misleading -- a 50% gain followed by a 50% loss averages to 0%, but you'd actually be down 25%. CAGR reflects what actually happened to your money.Read more: Your Retirement Number Ignores the One Cost Growing Twice as Fast
Is SIP better than a lump sum investment?
Neither is universally better -- a SIP (spreading investment across regular installments) reduces the risk of investing everything right before a downturn and suits regular income, while a lump sum captures more time in the market if invested when prices are relatively low. For most people investing from salary, SIP is the practical default; a lump sum windfall is often still better invested promptly rather than staggered indefinitely.Read more: Rs 25,215 Crore in “Safe” Debt Funds, Frozen Overnight
How does compounding actually grow money over time?
Compounding means your returns start earning their own returns, not just your original investment. The effect is small in early years and accelerates sharply later -- which is why starting early matters more than almost any other single investing decision, even more than the exact return rate.Read more: Your “Financial Advisor” Is Probably Just a Salesperson on Commission
What's a realistic long-term return to assume for equity investments?
Long-term equity returns vary a great deal by market and period, and past performance never guarantees future results. Most long-term financial plans use a conservative, inflation-aware assumption rather than recent bull-market numbers -- this calculator lets you test your own assumption and see how sensitive the outcome is to it.Read more: SEBI’s SCORES Portal Promises a 21-Day Fix — Here’s What That Timeline Doesn’t Tell You
Estimates only, not financial advice. See our Disclaimer.
