Investment & Savings

These calculators split into two kinds, and mixing them up is the most common mistake people make with them. SIP, Lumpsum and CAGR deal with market-linked money, where the return is an assumption you are choosing. FD and PPF deal with a contracted or government-set rate, where the maturity figure is a near-certainty.

For the market-linked ones, the return you type in decides the answer, so the useful exercise is not to run it once. Run it at 10%, 12% and 14% and look at how far apart the three land over twenty years. If the plan only works at the top number, it is not a plan.

SIP Calculator is for a fixed amount invested every month, and it assumes start-of-month instalments, which is how a SIP actually debits. Lumpsum Calculator is for a single amount left alone. The difference between them on the same total money is entirely about time in the market.

FD Calculator compounds quarterly by default, as Indian banks do, and handles non-cumulative deposits that pay interest out instead. No bank's rate is assumed anywhere - you enter the rate you were quoted. PPF Calculator applies the scheme's real lowest-balance rule, so it shows why a deposit on the 5th is worth more than the same deposit on the 6th.

CAGR Calculator works backwards: given a start value, an end value and a period, it reports the annual rate that connects them. It is the right measure for a single investment held over a period, and the wrong one as soon as money went in or out along the way.