SIP Calculator. Plan your wealth.
₹10,000/month SIP at 12% annual return over 15 years = approximately ₹50.4 lakh maturity value. Total invested: ₹18 lakh. Wealth gained: ~₹32.4 lakh — the power of compounding. Add 10% annual step-up to boost maturity to ~₹83 lakh.
SIP Calculator
The compounding math behind SIPs.
A Systematic Investment Plan invests a fixed amount in mutual funds monthly, leveraging rupee-cost averaging (buying more units when markets fall, fewer when they rise) and compound returns (where each month's investment earns returns on top of all prior months' investments). Over 15-20+ year horizons, this combination has historically produced 11-13% annualized returns in Indian equity mutual funds, comfortably ahead of fixed deposits (6-7%) and inflation (5-7%).
Step-up SIPs increase your monthly contribution by a fixed percentage each year (typically matching salary growth at 5-15%/yr). Mathematically, step-up SIPs front-load less capital and back-load more — but because later contributions still benefit from substantial remaining compounding time, total wealth at maturity typically grows 50-100% larger than flat SIPs over 20-year horizons.
Caveats: All return assumptions are approximations of historical averages; actual mutual fund returns vary year-to-year and can be negative in any single year. SEBI requires standardized disclosure of "amount invested vs amount you would have" in mutual fund marketing. SIPs are not insurance and not guaranteed. For 5-year horizons or shorter, consider lower-risk debt funds. For 15+ year horizons, equity-heavy diversified or index funds have historically been optimal.
SIP calculator FAQ.
What is a SIP and how does it work? ▾
SIP (Systematic Investment Plan) is a method of investing a fixed amount in mutual funds at regular intervals (typically monthly). Each instalment buys mutual fund units at the prevailing NAV — so when markets are low, you buy more units, and when markets are high, you buy fewer. Over long horizons (15-20+ years), this rupee-cost averaging smooths out volatility and historically delivers ~12% annualized returns in Indian equity funds.
How is SIP maturity value calculated? ▾
SIP uses a future-value formula for an annuity. Maturity = P × [(1 + r)^n - 1] / r × (1 + r), where P is monthly SIP, r is monthly return (annual ÷ 12), and n is total months. For example: ₹10,000/month at 12% annual return over 15 years (180 months) = approximately ₹50.4 lakh maturity from ₹18 lakh total invested. The wealth gained (returns) compounds because each instalment earns interest on top of all prior instalments.
What is a step-up SIP? ▾
A step-up SIP increases your monthly contribution by a fixed percentage each year (typically 5-15%) to match salary growth. Example: ₹10,000/month with 10% annual step-up means ₹11,000/month in Year 2, ₹12,100/month in Year 3, etc. Over 20 years, step-up SIP can result in 2-3× larger corpus vs flat SIP because more capital is invested in later years when compounding compounds more powerfully.
What return should I assume for SIP planning? ▾
Conservative assumptions: 8-10% for long-term hybrid funds, 11-13% for diversified equity funds, 14-16% for small-cap funds (with much higher volatility). Historical 15-year rolling returns for Nifty 50 have averaged ~12% per year. SEBI advertises mutual fund returns in a standardized "amount you would have made" format. For your own planning, use 10-12% as a moderate expectation. Higher assumptions (15%+) are increasingly unrealistic for large-cap equity funds.
What is the difference between SIP and lump sum investment? ▾
SIP invests gradually over time (rupee-cost averaging); lump sum invests once upfront. Over 15+ years with similar total amounts: lump sum mathematically outperforms SIP in rising markets (more time invested), but SIP outperforms in volatile/falling markets. For most retail investors with monthly income and no large windfall: SIP is the practical default. If you receive a large bonus or inheritance: lump sum is acceptable but split across 6-12 months to reduce timing risk.
Are SIP returns guaranteed? ▾
No. SIP is a method of investing, not a product. The underlying mutual fund returns depend on equity/debt market performance — they can be negative in any given year. The 12% historical average is an aggregate; individual years range from -50% (2008) to +60% (2020-2021). Long-term (15+ year) rolling returns for equity mutual funds have been positive in essentially all historical windows, but past performance does not guarantee future results.