A Systematic Investment Plan is the most common way Indian households build a corpus. You commit a fixed amount every month, the fund buys units at whatever the NAV happens to be that day, and your holding grows with the deposits plus the fund's returns. This SIP calculator shows that outcome in a few seconds.
What is a SIP calculator?
A SIP calculator answers one question: if I invest a fixed amount every month for a fixed number of years at a given annual return, what will I end up with? The answer splits into two parts, and the split is the part most people get wrong.
The first part is your own money. Over 10 years of Rs 5,000 a month you have put in Rs 6,00,000. The second part is what the market added. At a 12% annual return that gap is roughly Rs 5 lakh, which means most of the final amount was not your deposits at all. That is the argument for starting early: the compounding is doing the heavy lifting.
How the SIP maths works
- Each monthly instalment is treated as a separate lump sum that starts earning from the month it is paid.
- Every instalment is grown for the remaining number of months at the annual rate divided by 12.
- All the grown instalments are added together to give the final amount.
Because later instalments earn for less time, a SIP is not the same as investing the whole amount on day one. A Rs 6,00,000 lump sum at 12% for 10 years grows to about Rs 18,63,000, while Rs 5,000 a month over the same period reaches roughly Rs 11,61,000. The difference is timing, not performance.
What return should I use?
The number you type in is an assumption, not a promise. Equity mutual funds have historically returned somewhere in the region of 11-13% annually over long periods, but that range includes years of heavy losses. Using 12% for a long horizon is a common planning convention. Entering 15% tends to make a plan look better than it is, so treat anything above 12% as an optimistic scenario rather than a baseline.
What you enter should also match the fund's category. A debt fund might return 7%, an index fund 12-13%, and a small-cap fund 14% with far more volatility in between. The calculator does not adjust for risk, so pick a rate that matches your actual fund.
Step-up and other SIP options
Many funds offer a step-up SIP, where the instalment rises by a fixed amount or percentage every year. This matters because it keeps you investing a rising share of your income as your salary grows, without you having to remember to change anything. A 10% annual step-up over 10 years can add meaningfully to the final figure compared with a flat Rs 5,000.
You can approximate the effect by running the calculator twice: once with the current monthly amount, and again with a higher amount to reflect where the instalment will be a few years in. It is not an exact step-up projection, but it gives a fair sense of the range.
Things to keep in mind
- Exit load, though now capped at 1% for most equity funds and waived after 3 years, reduces the final amount slightly.
- ELSS SIPs give a Rs 1,50,000 deduction under section 80C, but the 3-year lock-in limits how useful that is as a retirement plan.
- Returns are not linear. A year of 30% gain followed by 30% loss leaves you down, which is why the year-by-year projection here smooths growth into a steady monthly rate.
- Taxation on gains has changed more than once. Check the current rate for your fund category rather than assuming.
How to use the SIP result
Run the numbers for two or three monthly amounts, not one. The useful question is not "what will I have" but "what happens if I invest Rs 3,000 instead of Rs 5,000, or if I start a year later". The gap between those scenarios is usually larger than the gap between any two assumed return rates, and it is the part you can actually control.
Frequently asked questions
How is SIP future value calculated?
Each monthly instalment is compounded separately for the number of months remaining after it is paid, at the annual rate divided by twelve. The grown value of every instalment is then added together.
Is 12% a reasonable SIP return to assume?
It is a common planning figure for equity mutual funds over a long horizon, but it is an assumption. Equity funds have years of negative returns inside that average, and the rate you should use depends on your fund category and your time horizon.
Does the SIP calculator include tax or exit load?
No. The projection shows invested amount plus estimated growth. Exit load is currently capped at 1% for most equity funds and waived after three years, and capital gains tax depends on the holding period and the rules in force when you redeem.
What is a step-up SIP?
A step-up SIP raises the monthly instalment automatically every year, either by a fixed amount or a percentage. It keeps your investing rate in step with rising income without manual changes.
Is Rs 500 per month enough to start a SIP?
The amount matters less than the duration, because compounding rewards time far more than it rewards large instalments. A smaller amount started ten years earlier usually beats a larger amount started late.