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SIP Calculator

Calculate expected returns on your monthly Systematic Investment Plan (SIP) in mutual funds.

  • Runs entirely in your browser
  • No sign-up, nothing stored
  • Formula explained below

Plan your investment

Adjust the sliders or type exact values.

₹
₹500₹1L
%
1%30%
yrs
1 yrs40 yrs
Estimated value after 10 years
₹58,08,477

You invest ₹30,00,000 over 120 monthly instalments; compounding at 12% adds ₹28,08,477.

Invested
₹30,00,000
Est. returns
₹28,08,477
Wealth multiple
1.94×
  • Invested52%
  • Returns48%

How your money grows

Value at the end of each year, split into what you put in and what compounding added.

  • Invested
  • Returns
Returns have not yet overtaken contributions
At 12% over 10 years, most of the final value is still money you put in. Longer horizons let compounding take over.

What each year adds

Your yearly contributions stay flat while the return earned each year keeps rising.

  • Contribution
  • Return earned

Return rate vs. time

Projected value of ₹25,000 a month. Shading runs from least to most wealth (scale below).

Return ↓ · Years →5y10y15y20y25y30y
8%
10%
12%
14%
16%
₹18,49,168
₹22,17,61,895
Return 12% · Years 10y → ₹58,08,477

Understanding the SIP Compounding Formula & Wealth Mechanics

A Systematic Investment Plan (SIP) channels regular, disciplined monthly contributions into mutual funds. Because each monthly instalment is invested at a distinct NAV, each compounds for a different duration, unleashing exponential compounding over long horizons.

M = P × [ (1 + i)ⁿ − 1 ] ÷ i × (1 + i)
M
Maturity value of your SIP corpus
P
Periodic investment amount (monthly instalment)
i
Periodic interest rate = (Annual Expected Return ÷ 12) ÷ 100
n
Total number of monthly instalments (Tenure in Years × 12)

Step-by-Step Example: Investing ₹10,000/Month for 15 Years

Suppose you initiate a monthly SIP of ₹10,000 in a diversified equity index fund with an expected annual return of 12% for a tenure of 15 years (180 instalments):

  • Total Principal Invested: ₹10,000 × 180 months = ₹18,00,000 (₹18 Lakhs)
  • Estimated Maturity Corpus: Approximately ₹50,45,760 (₹50.45 Lakhs)
  • Net Wealth Gain (Compounded Return): ₹32,45,760 (~180% return on invested principal)

The Compounding Tipping Point: Notice that in the first 5 years, your contributions represent the vast majority of your portfolio. Between years 8 and 10, the returns generated each month begin to surpass your fresh monthly contributions — this is the inflection point where compounding does the heavy lifting.

The Power of Rupee Cost Averaging

One of the greatest hazards in retail investing is market timing — attempting to buy at market bottoms and sell at peaks. Rupee Cost Averaging (RCA) removes emotional bias:

During Market Corrections

When equity markets drop, your fixed monthly allocation automatically purchases more mutual fund units at discounted Net Asset Values (NAVs).

During Bull Rallies

When markets rally and valuations climb, the same fixed monthly amount automatically purchases fewer units, protecting you from overpaying.

Mutual Fund Taxation Rules (Union Budget Framework)

Capital gains realized from mutual fund redemptions are subject to the revised Indian Income Tax provisions:

  • • Equity-Oriented Mutual Funds (>65% Equity):Long-Term Capital Gains (held > 12 months) are exempt up to ₹1.25 Lakh per financial year; gains beyond this threshold are taxed at 12.5% (without indexation). Short-Term Capital Gains (held ≤ 12 months) are taxed at 20%.
  • • Debt Mutual Funds (<35% Equity):Capital gains on debt funds acquired on or after April 1, 2023 are treated as short-term capital gains and taxed at your applicable slab rate, regardless of holding period.
  • • The FIFO Principle:Redemptions follow First-In, First-Out (FIFO). In a monthly SIP, each individual instalment must complete 365 days of holding to qualify for long-term equity capital gains rates.

Frequently Asked Questions

Are SIP mutual fund returns guaranteed?
No. Mutual funds invest in market-linked equity and debt securities and do not offer fixed or assured returns. The return rates entered into this calculator are projections for financial planning. Conservative long-term equity return assumptions typically range from 11% to 13% per annum.
What is the difference between Direct and Regular mutual fund plans?
Direct plans are purchased directly from Asset Management Companies (AMCs) without intermediary distributors, resulting in a 0.5% to 1.5% lower Total Expense Ratio (TER). Over a 20-year SIP horizon, choosing a Direct Plan can increase your total final maturity corpus by 15% to 25% due to saved distributor commissions.
Can I pause, stop, or increase my SIP anytime?
Yes. An SIP is completely flexible. You can pause instalments for 1 to 3 months, stop future debits without penalty, or initiate a Top-Up (Step-Up) mandate to increase monthly contributions in tandem with your annual salary increments.
What happens if my bank account lacks sufficient balance on the SIP debit date?
The mutual fund AMC does not levy a penalty for a missed SIP installment; they simply skip that month's purchase. However, your bank may charge an ECS/NACH bounce fee (typically ₹250 to ₹500). If three consecutive debits fail, the AMC typically terminates the recurring mandate automatically.
Why does the SIP formula multiply by (1 + i)?
The standard formula models an 'annuity due' where investments occur at the beginning of each monthly cycle. Multiplying by (1 + i) compounds each installment for the immediate month of deposit, aligning with how banking and fund house calculators report expected maturity values.
Is an SIP better than a Fixed Deposit (FD) or Recurring Deposit (RD)?
For financial horizons longer than 5 to 7 years, equity SIPs have historically outpaced inflation and bank deposits by delivering real returns after taxes. Bank FDs and RDs provide capital guarantees, making them ideal for short-term emergency funds, whereas equity SIPs are designed for long-term wealth accumulation.
Should I stop my SIP during a stock market crash?
Historically, halting SIPs during market declines is the most common mistake retail investors make. Market corrections allow your SIP to acquire mutual fund units at significantly lower NAVs, which accelerates wealth generation when markets inevitably recover.
How does inflation affect my final SIP maturity corpus?
A maturity corpus of ₹1 Crore in 20 years will not have the same purchasing power as ₹1 Crore today due to inflation. Assuming a 6% annual inflation rate, ₹1 Crore in 20 years will have a real purchasing power of approximately ₹31 Lakhs in today's terms. Use our Goal and Step-Up SIP calculators to factor inflation into your targets.

Keep planning

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