Why a SIP Projection Is Not a Return Guarantee

A projection applies an assumption; the market supplies the outcome

A SIP projection is not a return guarantee because it applies one constant assumed rate to a contribution schedule. Actual investment values respond to changing market prices, costs, taxes and the timing of each contribution.

Total contributions are defined by the schedule. Projected growth is model-dependent. Actual market growth remains uncertain.

What constant-return modelling does

The site's SIP model divides the entered annual percentage by 12 and applies that monthly rate to beginning-of-month contributions. That produces a consistent scenario that is useful for comparing inputs.

It does not predict a repeated monthly market return. Real monthly results may be positive, negative or flat, and the path taken can matter as much as a long-period average.

One contribution schedule, three return assumptions

Each row below uses ₹5,000 at the beginning of every month for 10 years. Only the assumed annual return changes. None of the three rates is presented as expected or recommended.

What changes—and what does not—in the table

The ₹6,00,000 contribution total does not move because the amount and schedule are unchanged. The projected future value does move because each rate produces a different modelled growth path.

The contribution-by-contribution mechanics are explained in the SIP return calculation guide.

Why the sequence of market returns matters

Two periods can have the same broad average return but different monthly paths. Because a SIP adds money throughout the period, a fall before many later contributions and a fall near the end do not affect the accumulated units and ending value in the same way.

A constant-return table removes that sequence so inputs can be compared cleanly. Removing it from the model does not remove it from real investing.

Costs, taxes, timing and rounding can change the outcome

• Fees and product costs can reduce the value retained by the investor and are not deducted by the projection.
• Taxes depend on the investment and the applicable rules and are not calculated in the displayed SIP result.
• Actual debit, allotment and valuation timing may differ from a beginning-of-month convention.
• Displayed rupee values are rounded, while the engine calculates with unrounded numbers.
• Changing, pausing or missing contributions changes both total capital and the periods available for growth.

Use a range to understand the assumption

Changing the assumed return is useful because it reveals how much of the displayed value depends on that input. It does not turn the highest or lowest scenario into a forecast.

A rising contribution schedule introduces another variable; the fixed-versus-step-up comparison separates additional capital from projected growth.