SIP Calculator

What is a SIP?

A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund on a fixed date every month. Instead of trying to time the market, you buy units at whatever the NAV is that day — more units when prices are low, fewer when they are high. Over the years this rupee-cost averaging smooths out volatility, and the compounding of returns on returns does the heavy lifting. SIPs are the most popular way Indian retail investors build wealth, with monthly inflows crossing tens of thousands of crores.

How the SIP calculator works

Enter the monthly amount, the annual return you expect and the number of years. The calculator compounds monthly and assumes each instalment is invested at the start of the month, which mirrors how a SIP mandate is actually debited. The step-up field lets you model an annual increase in your contribution — a realistic assumption if your salary grows each year.

SIP formula

Future value = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i)

• P = monthly investment
• i = monthly rate = annual return ÷ 12 ÷ 100
• n = total months

Example: ₹5,000 a month for 10 years at 12% gives n = 120, i = 0.01. Total invested = ₹6,00,000, maturity value ≈ ₹11.6 lakh, so the wealth gained is roughly ₹5.6 lakh — almost as much as you put in.

Why the step-up matters

Take the same ₹5,000 SIP for 20 years at 12%. A flat SIP grows to about ₹50 lakh on ₹12 lakh invested. Add a 10% annual step-up and the corpus becomes roughly ₹99 lakh on ₹34.4 lakh invested. The extra contribution is spread over two decades, so it barely pinches, yet it nearly doubles the outcome. Use the “Annual step-up” field to see this on your own numbers.

Choosing a realistic return

Large-cap equity funds have historically delivered 10–13% a year over long periods, mid and small caps somewhat more with higher swings, and debt funds 6–8%. Plugging in 18–20% will produce impressive but misleading numbers. A sensible planning assumption for a diversified equity portfolio is 11–12%, and 8% for a balanced portfolio. Remember to think about inflation too — a corpus of ₹1 crore in 20 years buys roughly what ₹35 lakh buys today at 5% inflation.

SIP tips

• Start early rather than big. Ten years of ₹5,000 beats five years of ₹10,000 because the earlier money compounds longer.
• Don’t stop during market falls. Those months buy the most units and contribute the most to long-term returns.
• Review, don’t churn. Check fund performance once a year against its category and benchmark; frequent switching resets your compounding and may trigger exit loads and tax.
• Match the horizon. Equity SIPs suit goals five or more years away; for shorter goals use debt or hybrid funds.

Frequently asked questions