SIP
Calculator
See the future value of a monthly SIP and how much of it is your invested money versus compounding gains.
Your SIP
Projected value
Assumes a constant return, compounded monthly. Actual mutual-fund returns vary and are not guaranteed.
What Is a SIP?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount in a mutual fund at regular intervals — most commonly monthly. Instead of timing the market with a single large purchase, you commit a set sum every month regardless of whether the market is up or down. This builds financial discipline, smooths out the impact of volatility through rupee-cost averaging, and lets compounding work uninterrupted over years.
SIPs are offered by all SEBI-registered mutual funds in India. You can start one through your AMC's platform, a registered distributor, or a direct-plan aggregator such as MF Central, Groww, Zerodha Coin, or Paytm Money. The minimum monthly amount for most equity funds is as low as Rs 500.
The SIP Formula
The maturity value of a monthly SIP is calculated using the future value of an ordinary annuity, adjusted for an end-of-period payment convention:
FV = P × [((1 + i)⊃n − 1) ÷ i] × (1 + i)
- P — monthly instalment amount (in rupees)
- i — monthly rate of return = annual expected return ÷ 12 ÷ 100
- n — total number of monthly instalments = years × 12
Each instalment earns returns for the remaining months of the tenure. The first instalment compounds the longest; the last one compounds for just one month. The formula aggregates all of these into a single future value. Because compounding is applied to each instalment separately, the longer the tenure, the more the gains slice grows relative to what you actually put in.
How to Use This Calculator
- Enter the monthly amount you plan to invest. Most equity SIPs start at Rs 500; a common starting point for salaried professionals is Rs 5,000–15,000 per month.
- Enter your expected annual return. For diversified equity funds benchmarked to Nifty 50 or Nifty 500, a 10–12% assumption is commonly used for long-term planning. For balanced or hybrid funds, 8–9% is more conservative. Debt fund SIPs typically target 6–7%.
- Enter the tenure in years. The power of compounding becomes most visible beyond 10 years — try toggling from 10 to 20 years and observe how the returns slice grows.
- The calculator instantly shows your total invested amount, the estimated return on that investment, and the projected maturity value.
Worked Example
Suppose you invest Rs 10,000 per month in a Nifty 50 index fund with an assumed annual return of 12%, for 15 years.
- Monthly rate (i) = 12 ÷ 12 ÷ 100 = 0.01
- Number of instalments (n) = 15 × 12 = 180
- Total invested = Rs 10,000 × 180 = Rs 18,00,000
- Maturity value = Rs 10,000 × [((1.01)⊃180 − 1) ÷ 0.01] × 1.01 = approximately Rs 50,46,000
- Estimated returns = Rs 50,46,000 − Rs 18,00,000 = approximately Rs 32,46,000
In this scenario the returns component is nearly 1.8 times the invested amount — illustrating why staying invested over a long horizon matters far more than timing the market precisely.
Why SIP Works: Rupee-Cost Averaging
Because you invest a fixed rupee amount each month, you buy more units of the fund when the NAV is low and fewer units when it is high. Over a full market cycle this averages out your cost per unit to below the simple average NAV. This is rupee-cost averaging. It does not eliminate the risk of loss, but it significantly reduces the damage of buying at a peak.
This is most visible during market corrections. An investor who continued their SIP through the March 2020 Covid crash and the 2022 rate-hike drawdown bought units at severely depressed NAVs, which contributed substantially to returns when markets recovered. Stopping a SIP during a downturn does the opposite — it locks in the loss and misses the recovery.
Step-Up SIP: Increasing Your Instalment Over Time
A step-up SIP (also called a top-up SIP) allows you to raise the monthly instalment by a fixed amount or a percentage each year. For example, starting at Rs 10,000 and stepping up by 10% per year means your instalment grows to Rs 11,000 in year two, Rs 12,100 in year three, and so on. Over a 15-year horizon a 10% step-up can increase the final corpus by 40–60% compared to a flat SIP at the starting amount. Most AMCs and direct platforms in India support automatic step-ups when you register the SIP.
Tax on SIP Returns (FY2025-26)
Each monthly instalment is treated as a separate purchase with its own holding period. For equity mutual funds:
- Units held for more than 12 months attract Long-Term Capital Gains (LTCG) tax at 12.5% on gains exceeding Rs 1.25 lakh in a financial year (Budget 2024 rules, effective from FY2024-25 onwards).
- Units held for 12 months or less attract Short-Term Capital Gains (STCG) tax at 20%.
- For debt mutual funds, all gains — regardless of holding period — are added to your income and taxed at your applicable slab rate.
This calculator shows pre-tax maturity values for simplicity. For large corpora, factor in LTCG when assessing actual take-home returns.
Frequently Asked Questions
Are SIP returns guaranteed?
No. SIPs invest in market-linked mutual funds and returns are not guaranteed. This calculator uses a fixed assumed return for illustration. Actual returns depend on the fund category, market conditions, and the specific tenure. Past performance of a fund does not guarantee future results.
Can I increase my SIP amount later?
Yes. A step-up SIP raises the instalment each year and can significantly grow your final corpus without requiring a large upfront commitment. Most AMCs and platforms supporting direct plans in India allow step-ups when you register or modify the SIP mandate.
Is SIP better than a lump-sum investment?
SIPs suit regular earners because they invest from monthly income and average out purchase cost through rupee-cost averaging. A lump sum can outperform in a consistently rising market because the entire principal compounds from day one, but it exposes the full capital to timing risk. Many investors use both: SIP for regular monthly savings and lump sum for one-time inflows such as a bonus or maturity proceeds.
What return rate should I use for equity funds?
Historical long-run returns for broad-market equity funds benchmarked to the Nifty 50 or Nifty 500 have been in the 10–13% CAGR range over periods of 10 or more years, though this is not guaranteed to repeat. For planning, 10–12% is a common assumption for large-cap or index equity funds; 8–9% for balanced hybrid funds; 6–7% for short-duration debt funds. Use a conservative estimate if you are planning for critical goals such as retirement or a child's education.
How does rupee-cost averaging work?
Because you invest a fixed rupee amount each month, you buy more units when the NAV is low and fewer units when it is high. Over time this lowers the average cost per unit below the simple average NAV. Rupee-cost averaging reduces the impact of short-term volatility but does not eliminate the risk of loss if the fund's NAV trends downward for the full tenure.
Are SIP gains taxable?
Yes. Equity fund gains on units held over 12 months are taxed as LTCG at 12.5% on gains above Rs 1.25 lakh per year. Units sold within 12 months attract STCG at 20%. Debt fund gains are taxed at slab rate regardless of holding period. Each monthly instalment has its own 12-month holding clock, so in a large SIP redemption some instalments may be LTCG and the most recent ones STCG.
Can I pause or stop a SIP?
Yes. You can pause a SIP for 1–6 months or cancel it permanently without penalty through your AMC or platform. Stopping the SIP does not redeem your existing units — they stay invested until you explicitly place a redemption request. Redemption may attract an exit load depending on the fund and how long you have held the specific units.
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