SIP Calculator

Each instalment is invested at the start of the month and grows at a monthly rate equal to the annual return divided by 12. For a fixed SIP this gives the standard formula used by fund houses: maturity value = P × ((1 + i)^n − 1) ÷ i × (1 + i), where P is the monthly amount, i the monthly rate and n the number of months.

For example, ₹5,000 a month for 10 years at 12% a year means 120 instalments and ₹6,00,000 invested. The calculator shows a maturity value of about ₹11,61,695, so the estimated return is about ₹5,61,695.

Doubling the period from 10 to 20 years doubles the money you invest but more than quadruples the maturity value in the example above, because the early instalments keep compounding for longer. Starting early matters more than starting big.

A step-up SIP raises the instalment every year, for example by 10% when your salary rises. Starting at ₹5,000 with a 10% yearly step-up for 10 years invests ₹9,56,245 and may grow to about ₹16,87,163, much more than a fixed SIP of the same starting amount.

Mutual fund returns are not fixed and change from year to year. Many people use about 12% a year for diversified equity funds over long periods, 7 to 8% for debt funds and a lower figure for conservative plans, but past returns do not guarantee future returns. Try a few rates to see a range of outcomes rather than relying on one number.

The result is before tax. Gains on equity funds held for more than a year are taxed as long-term capital gains above the yearly exemption, and expense ratios and exit loads also reduce the actual return.

A SIP spreads your investment over time, so you buy more units when prices are low and fewer when they are high. This rupee-cost averaging reduces the risk of investing everything just before a fall, and it builds a habit of saving every month. A lump sum invested at the start can earn more when markets rise steadily, but it takes more nerve and requires having the money up front.