How a SIP grows
A Systematic Investment Plan (SIP) moves a fixed amount from your bank account into a mutual fund on the same date every month. Each instalment buys units at that day's NAV. Over years, the units bought early have the longest time to compound, which is why the curve in the chart bends upward instead of rising in a straight line.
This calculator assumes each instalment is invested at the start of the month and grows at a steady annual return, compounded monthly. That is the same convention used by most Indian fund houses and investment apps, so your answer should match theirs to the rupee.
FV = P × [((1 + i)^n − 1) ÷ i] × (1 + i)Worked example
Notice how uneven the growth is. Halfway through the period the same SIP is worth only about ₹14.63 lakh. Stopping five years early would leave you with roughly ₹23.23 lakh. The last few years add the most, which is why staying invested matters more than picking the perfect start date.
What return should you assume?
- Equity funds: long-term Indian equity returns have often been in the 10–12% range, but they swing widely from year to year. Try 10% for a cautious plan and 12% for an optimistic one.
- Hybrid funds: 8–10% is a reasonable planning range.
- Debt funds: closer to 6–7.5%, in line with bank deposit rates.
No return is guaranteed. Use the calculator to see a range of outcomes rather than a single promise.
Why your statement may show something different
Real funds do not grow at a fixed rate. Your actual value depends on the NAV on each SIP date, the fund's expense ratio (already deducted from the NAV), exit loads if you redeem early, and tax on gains when you sell. For money you actually made, use the XIRR calculator on your real transaction history.
Make the SIP work harder
Two changes usually beat hunting for a higher-return fund: raising the SIP every year as your salary grows (see the step-up SIP calculator), and choosing a direct plan instead of a regular plan to cut costs (see the expense ratio calculator).
Frequently asked questions
Is SIP return guaranteed?
No. Mutual fund returns depend on the market. The rate you enter is an assumption for planning, not a promise.
Does this SIP calculator include tax?
No. Equity fund gains are taxed when you redeem: 20% if held up to 12 months, and 12.5% on long-term gains above ₹1.25 lakh a year. Use the capital gains calculator to estimate it.
What happens if I miss a SIP instalment?
Most funds simply skip that month; a few banks charge a bounce fee. Missing several instalments reduces the final value, and the calculator's result assumes every instalment is paid.
Should I choose the SIP date carefully?
It makes very little difference over long periods. Pick a date a few days after your salary is credited so the debit never fails.
Official references: AMFI – SIP basics