SIP Calculator (Systematic Investment Plan)
Calculate maturity wealth and estimated compounded returns for your mutual fund monthly SIP investments in India.
Increase your monthly SIP each year as your income grows (e.g. 10%/year).
After 10 years of monthly compounding
SIP Wealth Compounding Curve
Compounding trajectory over time
SIP Annual Wealth Progression
Detailed breakdown for each calendar year
| Year | Invested to Date | Returns Gained | Estimated Corpus |
|---|---|---|---|
| Year 1 | ₹1,20,000 | ₹8,093 | ₹1,28,093 |
| Year 2 | ₹2,40,000 | ₹32,432 | ₹2,72,432 |
| Year 3 | ₹3,60,000 | ₹75,076 | ₹4,35,076 |
| Year 4 | ₹4,80,000 | ₹1,38,348 | ₹6,18,348 |
| Year 5 | ₹6,00,000 | ₹2,24,864 | ₹8,24,864 |
How this is Calculated: SIP Maturity
Mathematical Formula
Variable Definitions
Worked Example Walkthrough
Scenario: ₹10,000 monthly SIP for 10 years at 12% expected annual return.
Calculation: P = 10,000, r = 0.01, n = 120. FV = 10,000 × [((1.01)^120 - 1)/0.01] × 1.01
Result: Invested: ₹12,00,000 | Est. Returns: ₹11,23,391 | Total Value: ₹23,23,391
Assumptions & Methodology
- Contributions are deposited at the start of each monthly cycle (annuity due).
- Returns are compounded on a monthly periodic basis.
- Taxation (LTCG / STCG) and fund expense ratios are not deducted from this gross estimate.
About this Calculation Model
The Systematic Investment Plan (SIP) calculator estimates the future corpus and compounded returns accumulated by making disciplined, recurring monthly deposits into mutual funds. It models the time value of money under an annuity due framework, accounting for continuous monthly reinvestment and optional annual step-up percentages as your disposable income increases.
How to Choose Your Calculator Inputs
1Monthly Investment Amount
The fixed capital you pledge to deposit at the beginning of each monthly billing cycle (minimum ₹500 in most Indian equity funds).
2Expected Annual Return Rate (p.a.)
The hypothetical annualized compound growth rate (CAGR) expected over the entire duration.
3Investment Horizon (Years)
The number of continuous years you intend to keep depositing without intermediate capital redemptions.
4Annual Step-Up Percentage
An optional yearly increment to your monthly SIP installment, designed to match annual salary hikes or business income expansion.
Interpreting Your Projections
The results panel differentiates between your cumulative capital invested and the wealth gained through market compounding. The "Wealth Gain Ratio" displays your net returns as a percentage of your out-of-pocket deposits. Check the yearly schedule table to see the tipping point where annual gains surpass your annual contributions.
Important Statutory & Practical Considerations
- Market-Linked Volatility: Mutual fund investments do not guarantee fixed returns. Actual annualized yields will fluctuate year-to-year depending on market conditions.
- Capital Gains Taxation: Long-Term Capital Gains (LTCG) on equity mutual funds held over 12 months are taxed at 12.5% on profits exceeding ₹1.25 Lakh per financial year (under the revised Finance Act 2024 provisions).
- Expense Ratio & Tracking Error: Mutual funds levy an annual Total Expense Ratio (TER) ranging from 0.1% to 1.5%, which slightly reduces gross NAV returns.
- Inflation Drag: Projections represent nominal future values. To assess real purchasing power, consider discounting results by an assumed 5%–6% long-term Indian inflation rate.
Frequently Asked Questions
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is a disciplined investment methodology offered by Indian mutual funds where an investor deposits a fixed sum at regular intervals (usually monthly) into a chosen mutual fund scheme. This instills fiscal discipline and averages your purchase cost through Rupee Cost Averaging.
How is SIP compounding calculated mathematically?
SIP returns are calculated using the Future Value of Annuity Due formula: FV = P × [((1 + r)^n - 1) / r] × (1 + r), where P is the monthly installment, r is the monthly periodic interest rate (annual rate divided by 12 and 100), and n is the total number of months (years × 12).
What is the advantage of Step-Up SIP?
A Step-Up SIP automatically escalates your monthly contribution by a specified percentage or fixed rupee amount annually. Because income generally grows each year, stepping up your SIP ensures you save more as you earn more, vastly accelerating corpus accumulation through compounding.
Are SIP returns tax-free in India?
No. Equity mutual fund returns held for more than 1 year are categorized as Long-Term Capital Gains (LTCG) and are taxed at 12.5% on gains exceeding ₹1.25 Lakhs per financial year. Debt mutual funds purchased on or after April 1, 2023 are taxed at your applicable income tax slab rate.
Can I stop or pause my SIP anytime without penalty?
Yes. Unlike bank recurring deposits or insurance plans, mutual fund SIPs carry zero penalty for pausing, modifying, or terminating contributions. Your previously accumulated units remain invested and continue to compound in the fund.
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