Compound Interest & SIP

Compounding means your returns start earning their own returns. Each period, growth is calculated on your original capital plus all the growth accumulated so far, which is why the balance curves upward over time rather than rising in a straight line. The longer the horizon, the more dramatic the effect, so starting early matters more than the exact amount.

A Systematic Investment Plan (SIP) is simply investing a fixed amount at regular intervals, usually monthly, into a fund or index. It spreads your entry across many price points, a discipline known as cost averaging, and pairs naturally with compounding because each contribution has time to grow. This calculator models exactly that: a monthly contribution growing at your chosen return.

The UAE charges no personal income tax and no capital gains or dividend tax for individuals. That means the returns shown here are what you keep, with nothing lost to tax on the way, unlike many home countries where investment gains are taxed. This is a meaningful advantage for expats building wealth here.

There is no guaranteed number. Historically, broad global equity indices have returned roughly 7-10% a year over long periods before inflation, while balanced portfolios sit lower and cash lower still. Use a figure you are comfortable defending, and remember that returns are volatile year to year even when the long-run average holds.