SIP Calculator

What is a SIP?

A Systematic Investment Plan (SIP) is a method of investing a fixed amount in a mutual fund scheme at regular intervals — almost always monthly in the Indian context. Instead of timing the market with lumpsum entries, you commit to a steady stream of contributions regardless of where the index is on a given day. The mutual fund house collects your contribution, allots units at the prevailing NAV, and the units accumulate over time. When the NAV is high, your fixed contribution gets fewer units; when the NAV falls, the same amount fetches more units. This is the rupee-cost-averaging effect, and it removes the cognitive burden of trying to identify market tops and bottoms.

SIPs became the default mode of equity investing for Indian retail households after the 2014-2020 bull cycle. As of recent AMFI data, monthly SIP inflows into Indian mutual funds run into tens of thousands of crores of rupees per month, dwarfing FII flows on most days. The simplicity of the structure — pick a fund, pick an amount, set up an ECS mandate, and forget — is why SIPs have become the on-ramp for first-time investors.

The math behind this calculator

For a regular SIP, the future value of an annuity-due (where each contribution earns interest from the date of contribution) is:

where P is the monthly contribution, r is the monthly rate of return (annual rate divided by 12, then by 100), and n is the total number of months. If you enable step-up mode, the calculator instead simulates the SIP month-by-month, applying compounding monthly and increasing the contribution at the start of each new year by your chosen step-up percentage.

Why a step-up SIP usually beats a regular one

Most salary earners get annual increments of 5-15%. A step-up SIP ratchets your contribution up by a similar percentage each year, so the effort feels constant but the absolute corpus grows much faster. A 10% annual step-up on a ₹10,000 starting SIP, run for 25 years at a 12% assumed return, can compound to roughly twice the corpus of a regular ₹10,000 SIP held flat. Try it in the calculator above — flip between Regular and Step-up at the same starting amount and watch the gap.

What return assumption should you use?

This is the most consequential input. Equity mutual fund returns in India have varied widely across decades — some 10-year windows have delivered double-digit CAGR, others have been mediocre. There is no guaranteed number. Common illustrative assumptions used in publications and brochures range from 10% to 14% for equity funds and 6% to 8% for debt funds. We deliberately default to 12% as a neutral midpoint — it is neither aggressive nor conservative, and it is roughly the long-run nominal return that equity index ETFs have delivered in many Indian backtests over multi-decade windows. But it is an assumption, not a forecast. The actual outcome of any real SIP depends on the entry timing, the fund selection, expense ratios, and the unknowable future. Use the slider to model multiple scenarios — a more honest exercise than fixating on one number.

What this calculator does NOT account for

• Expense ratios. A 1% expense ratio compounds to a meaningful drag over 20 years. The calculator assumes the return you enter is already net of expenses.
• Capital gains tax. When you eventually redeem your units, long-term capital gains tax (12.5% above ₹1.25L exemption per FY for equity funds, post-Budget 2024) will reduce the in-hand corpus. Use our LTCG calculator to model the post-tax outcome.
• Inflation. A corpus that looks large in nominal rupees may have much less purchasing power decades from now. To estimate real returns, subtract your expected long-run inflation rate (Indian CPI has averaged 4-7% in recent decades) from your return assumption before running the projection.
• Market path.Real markets do not deliver smooth 12% every year. Real SIPs experience drawdowns, sideways years, and occasional big rallies. The calculator's smooth curve is a simplification.

Common SIP questions

Should I start with a small SIP or wait for a market correction?

We do not give individual investment advice. As a general observation, the academic and historical evidence on rupee cost averaging suggests that for long horizons, time in the market has mattered more than timing the market for most investors. But this is a personal financial decision that depends on your goals, income stability, and risk tolerance — please consult a SEBI-registered adviser if you want a personalised plan.

How long should I run my SIP?

The longer the horizon, the more pronounced the compounding effect. The calculator illustrates this clearly: doubling the duration more than doubles the corpus, because the later years compound on the larger base built in the earlier years. Long-horizon equity SIPs (15-25 years) historically had a higher probability of positive real returns than short-horizon ones, though no horizon eliminates equity risk.

This page is educational only and does not constitute investment advice. Past returns are not indicative of future results. Mutual fund investments are subject to market risks; please read all scheme-related documents carefully and consult a SEBI-registered adviser before investing.