SIP Calculator

A Systematic Investment Plan, universally called SIP in India, is the single most important wealth-building tool for the salaried Indian middle class. By investing a fixed amount every month into a mutual fund, you sidestep the impossible problem of market timing, harness the power of compounding, and build a corpus that comfortably outpaces inflation over the long term. This SIP calculator shows you exactly how much your monthly contribution can grow to over five, ten or thirty years at any expected rate of return.

The SIP future-value formula is mathematically a future value of annuity calculation. Each monthly instalment compounds for a different number of months — your first SIP compounds for the entire tenure, while your last SIP compounds for just one month. The formula bundles all these into a single closed-form expression. The assumption that matters most is the rate of return. For diversified Indian equity mutual funds (large-cap, flexi-cap, index funds tracking Nifty 50 or Nifty 500), a 10-12% long-term annualised return is a reasonable historical benchmark over 15+ year periods. For hybrid funds (mix of equity and debt), use 8-10%. For pure debt funds, use 6-7%. Always run the calculator at multiple rates to see the range of possible outcomes.

The magic of compounding becomes obvious only at long tenures. A SIP of ₹10,000 a month for 10 years at 12% becomes ₹23.2 lakh. The same SIP for 20 years becomes ₹99.9 lakh — not double, but more than four times. For 30 years, it becomes ₹3.5 crore. This non-linearity is why every personal finance advisor in India repeats the same advice: start as early as possible, even with a small amount. ₹3,000 a month started at age 25 will outgrow ₹10,000 a month started at age 35 by retirement.

A step-up SIP is the next-level optimisation. Instead of investing the same ₹10,000 every month for 20 years, you increase the SIP by 8-10% every year in line with your salary growth. The same starting amount with a 10% annual step-up grows to roughly ₹1.7 crore over 20 years instead of ₹99.9 lakh. The behavioural trick is automating the step-up so you never have to consciously decide to increase the contribution; most platforms now offer this feature.

Rupee cost averaging is the second pillar of SIP investing. By buying the same rupee amount every month, you automatically buy more units when prices are low and fewer units when prices are high. Over a complete market cycle, this averages out your purchase cost below the market average. The flip side is that during a sustained bull market, lump-sum investing actually outperforms SIP — but no one knows in advance which kind of market we are in, so SIP is the disciplined default.

For selecting funds, prefer Direct plans over Regular (saves 0.5-1% commission per year), look at expense ratio (under 1% for active funds, under 0.3% for index funds), and check rolling 5-year returns relative to the category benchmark rather than the chart-topping recent year. Avoid the temptation to chase last year's top performer; mean reversion in mutual funds is real.

Finally, do not check your SIP balance daily. The biggest predictor of investor returns over a lifetime is behaviour, not fund selection. Investors who panic-sell during a 30% market drop typically underperform a buy-and-hold investor by 1-2% per year. Set up the SIP, automate the increment, and look at the portfolio twice a year. Use this calculator every January as a motivator — seeing how the numbers compound over decades is the easiest way to stay disciplined.