SIP Calculator

Regular investing from the UAE

“SIP” — a systematic investment plan — is how many UAE residents describe investing a fixed amount every month, often into index funds or mutual funds. The UAE has no personal income tax, so for a UAE tax resident the growth projected above isn't reduced by local tax on salary, interest or gains.

Two things still matter. First, who regulates the platform: investment firms are licensed by the Securities and Commodities Authority onshore, the DFSA in the DIFC, or the FSRA in ADGM — check the licence before you invest. Second, your other tax home: the absence of UAE tax doesn't switch off tax where you're a citizen or still tax-resident. US citizens, for example, are taxed on worldwide income wherever they live.

If you're employed, your end-of-service gratuity is a lump sum worth planning around — investing it on arrival is the lump-sum case compared below.

Currency is the last piece. The dirham is pegged to the US dollar, so a dollar-denominated fund adds little currency risk for someone spending in AED — but a fund in sterling, rupees or euros will move with that exchange rate, for better or worse, on top of the return modelled here.

Worked example: AED 2,000 a month for 15 years

A common starting SIP. At an illustrative 6% a year for 15 years, before platform fees:

• You pay in AED 360,000.
• It could grow to about AED 576,600 — roughly AED 216,600 of growth on top of what you put in.

Change the amount, return or years in the calculator above to test your own version; try a lower return too, because none of these is guaranteed.

How compounding builds wealth

Returns start earning returns of their own: a lump sum grows by FV = PV × (1 + r)ⁿ, and a regular contribution by FV = P × [ ((1 + r)ⁿ − 1) / r ] × (1 + r), where each payment compounds for as long as it stays invested. The earliest contributions do most of the work, which is why starting early matters more than starting big.

Lump sum or monthly — which ends up ahead?

Switch between the two modes and the answer is consistent: for the same total contributed, a lump sum wins, because every unit of money is invested for the full horizon rather than for an average of half of it. Take AED 360,000 at a 6% expected return over 15 years:

• All at once — AED 360,000 invested on day one grows to roughly AED 863,000.
• AED 2,000 a month for 15 years — the same AED 360,000 contributed, ending at roughly AED 577,000.

A AED 286,000 gap, purely from time in the market — but the comparison is usually hypothetical. If you don't have AED 360,000 today, the real choice is AED 2,000 a month or nothing, and AED 577,000 beats nothing. Monthly investing also spreads your entry over 180 different prices instead of betting everything on one day.

Where the money to invest comes from

Start from what survives tax, not your salary. Work out your monthly take-home pay, subtract what you genuinely spend, and use what's left — the whole result depends on not stopping.

Tips and common mistakes

• Check the platform's licence. SCA, DFSA (DIFC) or FSRA (ADGM) — and note which one protects you.
• Watch fees and currency. A 1–2% annual fee compounds against you just as returns compound for you — lower the expected return above by the fee to see the effect.
• Be realistic about returns. Model a conservative rate as well as an optimistic one — real returns vary and can be negative in any year.
• Compare it against paying down debt. The interest a loan overpayment saves is a guaranteed return, which an expected 10% is not.