How are SIP returns calculated?

SIP returns are calculated using the compound interest formula for an annuity: M = P × ({[1 + i]^n – 1} / i) × (1 + i), where P is the monthly amount, i is the monthly interest rate, and n is the number of months.

Is SIP better than a lump sum investment?

SIP is generally considered better for long-term retail investors because it promotes disciplined saving and uses 'Rupee Cost Averaging' to buy more units when prices are low and fewer when prices are high.

What is the ideal tenure for a SIP?

The power of compounding works best over long periods. For wealth creation, a tenure of 10 to 20 years or more is often recommended to see significant growth.

SIP Calculator — Plan Your Wealth

A Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds and grow your wealth through the power of compounding. Enter your monthly investment amount, expected return rate, and tenure to see your future corpus instantly.

Monthly Investment (₹)

Expected Annual Return Rate (%)

Investment Period (Years)

📈 Compound Growth — see the power of time 🇮🇳 India Specific — optimized for MF investors 🔒 100% Private — data stays on your device 📅 Last updated: May 2026

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan (SIP) is a smart and hassle-free mode for investing money in mutual funds. It allows you to invest a fixed amount at regular intervals—usually monthly. SIPs are popular because they allow investors to participate in the stock market with small amounts of money, reducing the risk of market volatility through Rupee Cost Averaging.

Benefits of Investing via SIP

Power of Compounding

When you invest regularly, you earn returns on your returns. Over long periods (15+ years), this leads to exponential growth of your wealth.

Rupee Cost Averaging

Since you invest the same amount every month, you buy more mutual fund units when the market is low and fewer when it's high, lowering your average cost per unit.

The SIP Formula

Our calculator uses the standard compound interest formula for a regular annuity (invested at the beginning of the period):

M = P × ({[1 + i]^n – 1} / i) × (1 + i)

M = Maturity amount (Future Value)
P = Monthly investment amount
i = Monthly interest rate (Annual rate / 12 / 100)
n = Number of months (Years × 12)

Why Tenure Matters

A key takeaway for all investors is that time is more important than timing. A ₹5,000 monthly SIP at 12% for 10 years grows to ~₹11.6 Lakhs. However, the same SIP for 20 years grows to ~₹50 Lakhs—nearly 4.3 times more wealth by just doubling the time.

Important Considerations

Market Risks: Mutual fund investments are subject to market risks. Past performance does not guarantee future results.
Inflation: While ₹1 Crore sounds like a lot today, its purchasing power will be much lower in 20 years. Consider inflation when planning.
Step-Up SIP: Increasing your SIP amount by even 10% every year can lead to significantly higher wealth creation.

Disclaimer: This calculator is for educational purposes and provides estimates. Actual returns may vary based on the performance of the chosen mutual fund scheme.

Frequently Asked Questions

What is a realistic return rate for Equity SIPs in India?

While it varies, many financial advisors use 10% to 15% as a benchmark for long-term equity mutual fund returns in India (CAGR).

Can I stop my SIP at any time?

Yes. Most mutual funds allow you to stop or pause your SIP without any penalty. You can also withdraw your accumulated money, subject to exit loads and taxes.

What is the tax on SIP returns in India?

As of 2024, Long Term Capital Gains (LTCG) over ₹1.25 Lakh per year are taxed at 12.5%. Short Term Capital Gains (STCG) are taxed at 20%.

Does this calculator account for taxes or inflation?

No. This calculator provides gross estimates based on the input rate. It does not account for taxes, exit loads, or inflation adjustments.