{"id":11477,"date":"2026-05-12T13:43:32","date_gmt":"2026-05-12T13:43:32","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?p=11477"},"modified":"2026-05-05T07:38:47","modified_gmt":"2026-05-05T07:38:47","slug":"power-sip-lemonn-leveraged-sip-explained","status":"publish","type":"post","link":"https:\/\/lemonn.co.in\/blog\/finance\/power-sip-lemonn-leveraged-sip-explained\/","title":{"rendered":"What is Power SIP? Lemonn’s Leveraged SIP Explained"},"content":{"rendered":"
\"What<\/figure>\n\n\n

The Problem Power SIP Solves<\/strong><\/h2>\n\n\n\n

Regular SIP investors accumulate wealth slowly by investing a fixed monthly amount. But what if you could invest more than you have, using borrowed funds at a low rate, to accelerate wealth creation? Power SIP by Lemonn combines the discipline of SIP with the capital efficiency of Margin Trade Funding (MTF).<\/p>\n\n\n\n

What is Power SIP?<\/strong><\/h2>\n\n\n\n

Power SIP is Lemonn’s product that allows you to invest a multiple of your regular SIP amount in equity mutual funds or stocks by borrowing the additional capital through MTF at 10.95% per annum. You commit your regular SIP amount; Lemonn lends additional capital as margin.<\/p>\n\n\n\n

Parameter<\/strong><\/td>Regular SIP<\/strong><\/td>Power SIP<\/strong><\/td><\/tr>
Monthly Commitment<\/td>\u20b910,000<\/td>\u20b910,000 (your contribution)<\/td><\/tr>
Actual Investment<\/td>\u20b910,000<\/td>\u20b925,000\u2013\u20b950,000<\/td><\/tr>
Leverage Ratio<\/td>1x<\/td>2.5x\u20135x<\/td><\/tr>
Interest on Borrowed Amount<\/td>Nil<\/td>10.95% p.a. on MTF portion<\/td><\/tr>
Potential Return Amplification<\/td>Market return<\/td>Higher (before interest cost)<\/td><\/tr>
Risk<\/td>Market risk only<\/td>Market risk + leverage risk<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

How Power SIP Works: Step-by-Step<\/strong><\/h2>\n\n\n\n
    \n
  1. Set your SIP amount, say \u20b910,000\/month<\/li>\n\n\n\n
  2. Choose your Power SIP multiplier (e.g., 3x = \u20b930,000 total investment)<\/li>\n\n\n\n
  3. Lemonn provides \u20b920,000 via MTF at 10.95% p.a.<\/li>\n\n\n\n
  4. The full \u20b930,000 is invested in your chosen equity fund\/stocks on SIP date<\/li>\n\n\n\n
  5. Interest accrues on the borrowed \u20b920,000 daily<\/li>\n\n\n\n
  6. Over time, as your portfolio grows, you can repay principal at your pace<\/li>\n<\/ol>\n\n\n\n

    The Math: When Power SIP Works in Your Favour<\/strong><\/h2>\n\n\n\n

    Power SIP creates positive leverage when your investment return exceeds the cost of borrowing (10.95% p.a.). Historically, Nifty 50 has delivered ~12% CAGR over 10-year periods, marginally above the MTF rate. However, volatility means short-term periods can be painful.<\/p>\n\n\n\n

    Annual Market Return<\/strong><\/th>3x Power SIP Return (after 10.95% cost)<\/strong><\/th>Regular SIP Return<\/strong><\/th><\/tr><\/thead>
    15%<\/td>~22.1% (net of interest)<\/td>15%<\/td><\/tr>
    12%<\/td>~16.3% (net of interest)<\/td>12%<\/td><\/tr>
    10%<\/td>~12.1% (near breakeven)<\/td>10%<\/td><\/tr>
    8%<\/td>~7.0% (below breakeven)<\/td>8%<\/td><\/tr>
    0%<\/td>-7.3% (interest drag)<\/td>0%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    Who Should Use Power SIP?<\/strong><\/h2>\n\n\n\n
      \n
    • Investors with 7\u201310 year horizon who can withstand short-term portfolio swings<\/li>\n\n\n\n
    • Those confident in long-term equity returns exceeding 11%<\/li>\n\n\n\n
    • Investors with stable income to sustain SIP payments through market downturns<\/li>\n\n\n\n
    • Not suitable for: Near-retirement investors, low risk tolerance, or those who panic-sell<\/li>\n<\/ul>\n\n\n\n

      Key Risks to Understand<\/strong><\/h2>\n\n\n\n

      Margin Call Risk<\/strong><\/h3>\n\n\n\n

      If your portfolio falls sharply and the LTV (loan-to-value) ratio breaches limits, Lemonn may require you to top up or reduce positions. Unlike regular SIP, Power SIP can require action during market crashes, exactly when you least want to sell.<\/p>\n\n\n\n

      Interest Cost Compounding<\/strong><\/h3>\n\n\n\n

      At 10.95% p.a., interest on the borrowed amount accumulates. In flat or down markets, this erodes your returns significantly. Calculate total interest cost over your intended horizon before committing.<\/p>\n\n\n\n

      Power SIP vs Other Leveraged Products<\/strong><\/h2>\n\n\n\n
      Product<\/strong><\/th>Leverage Mechanism<\/strong><\/th>Rate<\/strong><\/th>Suitability<\/strong><\/th><\/tr><\/thead>
      Power SIP<\/td>MTF on equity portfolio<\/td>10.95% p.a.<\/td>Long-term equity investors<\/td><\/tr>
      Futures SIP<\/td>F&O contracts<\/td>Implicit in pricing<\/td>Experienced traders only<\/td><\/tr>
      Leveraged ETFs<\/td>Daily reset derivatives<\/td>Built into product<\/td>Short-term tactical only<\/td><\/tr>
      Home Equity Investment<\/td>Loan against property<\/td>8\u201312% p.a.<\/td>Real estate investors<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

      The Problem Power SIP Solves Regular SIP investors accumulate wealth slowly by investing a fixed monthly amount. But what if you could invest more than you have, using borrowed funds at a low rate, to accelerate wealth creation? Power SIP by Lemonn combines the discipline of SIP with the capital efficiency of Margin Trade Funding […]<\/p>\n","protected":false},"author":15,"featured_media":11506,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_ayudawp_aiss_exclude":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-11477","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/11477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/comments?post=11477"}],"version-history":[{"count":6,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/11477\/revisions"}],"predecessor-version":[{"id":11500,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/11477\/revisions\/11500"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media\/11506"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=11477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/categories?post=11477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/tags?post=11477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}