SIP '6.7% Return' Myth: What Your Real Gains Look Like

A viral social media post claims SIPs only gave 6.7% returns over 20 years. That number is wrong because it uses a flawed calculation method. SIPs actually work best in flat or falling markets — and the real returns are far higher.

Here's what happened: A viral claim circulating on social media argues SIPs delivered only 6.7% returns over a 20-year period, alarming many retail investors.. The flaw: the post compared lump-sum CAGR of an index to SIP performance — two completely different calculation methods that cannot be fairly compared.. SIPs use rupee-cost averaging — you buy more units when markets fall, which lowers your average cost and boosts long-term returns significantly..

What you should do: Calculate your actual SIP returns using XIRR in Excel or any mutual fund app — not simple CAGR, which is designed for lump sums only.. Check your SIP's rolling returns over 10–15 year periods on platforms like Valueresearchonline or MFI Explorer before drawing conclusions.. Avoid pausing or stopping SIPs during flat or falling markets — that is exactly when rupee-cost averaging quietly builds your wealth the fastest..

Pro tip: A SIP's XIRR looks 'low' in a flat market only because your most recent installments haven't had time to compound — zoom out to 15+ years and the gap disappears.