SIP Calculator
Calculate returns on your Systematic Investment Plan (SIP) in mutual funds. See how your monthly investments grow over time with the power of compounding.
Invested Amount
₹6,00,000
Estimated Returns
₹5,61,695
Total Value
₹11,61,695
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Invest ₹5 K/mo at 12% for 10 yrs → ₹11.6 L
Investment Growth Over Time
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Year-by-Year Breakdown
| Year | Invested | Interest Earned | Total Value |
|---|---|---|---|
| 1 | ₹60,000 | ₹4,047 | ₹64,047 |
| 2 | ₹1,20,000 | ₹16,216 | ₹1,36,216 |
| 3 | ₹1,80,000 | ₹37,538 | ₹2,17,538 |
| 4 | ₹2,40,000 | ₹69,174 | ₹3,09,174 |
| 5 | ₹3,00,000 | ₹1,12,432 | ₹4,12,432 |
| 6 | ₹3,60,000 | ₹1,68,785 | ₹5,28,785 |
| 7 | ₹4,20,000 | ₹2,39,895 | ₹6,59,895 |
| 8 | ₹4,80,000 | ₹3,27,633 | ₹8,07,633 |
| 9 | ₹5,40,000 | ₹4,34,108 | ₹9,74,108 |
| 10 | ₹6,00,000 | ₹5,61,695 | ₹11,61,695 |
What is a SIP (Systematic Investment Plan)?
A Systematic Investment Plan (SIP) is a disciplined method of investing a fixed amount at regular intervals — typically monthly — into mutual fund schemes. Instead of investing a large lump sum at once, SIP allows you to spread your investment over time. This approach is particularly popular among salaried individuals in India because it aligns with monthly income cycles and removes the need to time the market. According to AMFI data, monthly SIP contributions in India crossed $2.5 billion (over ₹20,000 crore) in recent years, underscoring the massive adoption of this investment method across the country.
SIP leverages two powerful concepts: rupee cost averaging and the power of compounding. Rupee cost averaging means you buy more units when prices are low and fewer units when prices are high, effectively averaging out the purchase cost over time. Compounding ensures that your returns generate further returns, creating an exponential growth curve over longer horizons.
How SIP Works — The Formula
The future value of a SIP is calculated using the formula:
FV = P × [((1 + r)n − 1) / r] × (1 + r)
- P = Monthly investment amount
- r = Monthly rate of return (annual rate / 12 / 100)
- n = Total number of monthly instalments (years × 12)
The term (1 + r) at the end accounts for the fact that each instalment is invested at the beginning of the month, giving it an extra month of compounding.
Example 1: ₹5,000/month SIP at 12% for 10 Years
Suppose you invest ₹5,000 per month in an equity mutual fund that delivers an average annual return of 12% over 10 years:
- Total amount invested: ₹5,000 × 120 months = ₹6,00,000
- Estimated returns: approximately ₹5,61,695
- Total corpus at maturity: approximately ₹11,61,695
Your money nearly doubles — the ₹6 lakh you invested grows to over ₹11.6 lakh. Extend this to 20 years, and the same ₹5,000/month SIP could grow to roughly ₹49.96 lakh, demonstrating the extraordinary impact of long-term compounding.
Example 2: Building a ₹1 Crore Corpus
A common goal for Indian investors is building a ₹1 crore corpus. Here is what it takes at 12% expected returns:
- 25-year horizon: ₹5,300/month — invest ₹15.9 lakh, earn ₹84.1 lakh in returns
- 20-year horizon: ₹10,100/month — invest ₹24.2 lakh, earn ₹75.8 lakh in returns
- 15-year horizon: ₹20,000/month — invest ₹36 lakh, earn ₹64 lakh in returns
- 10-year horizon: ₹43,500/month — invest ₹52.2 lakh, earn ₹47.8 lakh in returns
Notice the pattern: starting 10 years earlier lets you invest less than one-eighth of the monthly amount while still reaching the same ₹1 crore goal. This is the single most powerful argument for starting a SIP early.
Step-Up SIP: Supercharge Your Wealth
A step-up SIP (also called a top-up SIP) increases your monthly investment by a fixed percentage every year — typically 10% to 15%. Since your income generally rises annually, stepping up your SIP helps you invest more without significantly impacting your lifestyle. For instance, starting with ₹5,000/month and increasing it by 10% annually at 12% returns over 10 years would yield approximately ₹17.3 lakh instead of ₹11.6 lakh — nearly 50% more wealth.
SIP vs Other Investment Options — Quick Comparison
| Parameter | SIP (Equity MF) | Fixed Deposit | PPF | Lump Sum MF |
|---|---|---|---|---|
| Expected Returns | 10–15% p.a. | 6–7.5% p.a. | 7.1% p.a. | 10–15% p.a. |
| Risk Level | Moderate–High | Very Low | Zero (Govt.) | High |
| Lock-in Period | None (ELSS: 3 yrs) | 7 days–10 yrs | 15 years | None (ELSS: 3 yrs) |
| Tax on Returns | LTCG above ₹1.25L at 12.5% | As per income slab | Fully exempt (EEE) | LTCG above ₹1.25L at 12.5% |
| Best For | Long-term wealth | Capital safety | Tax-free returns | Windfall investing |
| Rupee Cost Averaging | Yes | N/A | N/A | No |
Common SIP Myths — Busted
- “SIP guarantees returns”: SIPs invest in mutual funds, which are market-linked. Returns are not guaranteed. However, long-term SIPs (10+ years) in diversified equity funds have historically delivered positive real returns.
- “I need a large amount to start”: Most AMCs allow SIPs starting at just ₹500 per month, and some offer ₹100 SIPs. You can start small and increase via step-up.
- “I should stop my SIP when markets fall”: This is the opposite of what you should do. Falling markets let your SIP buy more units at lower prices, which boosts long-term returns via rupee cost averaging.
- “SIP and mutual funds are different products”: SIP is just a method of investing; it is not a product. You invest in mutual fund schemes through the SIP route.
- “Higher NAV means the fund is expensive”: NAV reflects the accumulated value of the fund, not whether it is overvalued. A fund with NAV ₹500 is not more expensive than one with NAV ₹50 — what matters is future growth potential.
Tax Implications of SIP in India
Each SIP instalment is treated as a separate purchase for tax purposes. When you redeem, the first-in-first-out (FIFO) method applies:
- Equity mutual funds (held > 1 year): Long-term capital gains (LTCG) above ₹1.25 lakh per financial year are taxed at 12.5%.
- Equity mutual funds (held < 1 year): Short-term capital gains (STCG) are taxed at 20%.
- Debt mutual funds: Gains are taxed as per your income-tax slab regardless of holding period.
- ELSS funds: Investments up to ₹1.5 lakh per year qualify for Section 80C deduction under the old tax regime, with a 3-year lock-in period.
Since each monthly SIP instalment has its own purchase date, earlier instalments become long-term (and thus lower-taxed) sooner. This is another benefit of starting your SIP early.
Tips and Best Practices
- Start early: Even small amounts invested early benefit enormously from compounding. A 25-year-old investing ₹3,000/month can outperform a 35-year-old investing ₹6,000/month over the same retirement date.
- Choose realistic return rates: Large-cap equity funds have historically delivered 10–12% CAGR, mid-cap funds 12–15%, and debt funds 6–8%. Avoid assuming returns above 15% for long-term planning.
- Stay invested through market dips: SIP works best when you continue investing during bear markets. Stopping SIPs during downturns defeats the purpose of rupee cost averaging.
- Link SIPs to financial goals: Assign each SIP to a specific goal — child’s education, home down payment, retirement — so you pick the right fund category and tenure.
- Review annually, not monthly: While market volatility is normal month-to-month, review your SIP portfolio once a year to ensure the fund is performing in line with its benchmark and category peers.
- Diversify across fund categories: Do not put all SIPs into one fund. Split across large-cap, mid-cap, and flexi-cap funds to balance risk and return.
- Use direct plans: Direct mutual fund plans have lower expense ratios (0.5–1% less) than regular plans, which compounds into significantly higher returns over 15–20 years.
When to Use a SIP Calculator
Use this SIP calculator when you want to estimate the future value of your regular monthly investments, compare different SIP amounts and tenures, understand the impact of step-up SIPs, or plan for specific financial goals like building a ₹1 crore corpus. It helps you visualise how consistent, disciplined investing — even with modest amounts — can create significant long-term wealth.