What is a SIP calculator?
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund every month instead of investing a large sum at once. A SIP calculator shows how much those monthly instalments could be worth at the end of your chosen period, based on the return you expect.
- See the total amount you invest, the estimated returns and the final value in one place.
- Compare different monthly amounts, time periods and return rates in seconds.
- Plan for goals such as a home, your child's education or retirement.
How are SIP returns calculated?
SIP returns are calculated using the future value of a series of monthly payments, with returns compounded every month. Each instalment is invested at the start of the month.
- M = estimated maturity value
- P = monthly SIP amount
- i = monthly rate of return (annual return ÷ 12 ÷ 100)
- n = number of monthly instalments (years × 12)
Example
If you invest ₹5,000 a month for 10 years at an expected return of 12% a year, you invest ₹6,00,000 over 120 instalments. The estimated value at the end is ₹11,61,695, which means estimated returns of ₹5,61,695.
How much can your SIP grow? (at 12% a year)
| Monthly SIP | 5 years | 10 years | 15 years | 20 years |
|---|---|---|---|---|
| ₹1,000 a month | ₹82,486 | ₹2,32,339 | ₹5,04,576 | ₹9,99,148 |
| ₹5,000 a month | ₹4,12,432 | ₹11,61,695 | ₹25,22,880 | ₹49,95,740 |
| ₹10,000 a month | ₹8,24,864 | ₹23,23,391 | ₹50,45,760 | ₹99,91,479 |
| ₹25,000 a month | ₹20,62,159 | ₹58,08,477 | ₹1,26,14,400 | ₹2,49,78,698 |
The table shows the power of compounding: the longer you stay invested, the larger the share of your final value that comes from returns rather than your own money.
What is a step-up SIP?
In a step-up (or top-up) SIP, you increase your monthly SIP by a fixed percentage every year, usually in line with your salary increase. Most fund houses let you set this up when you start the SIP.
For example, ₹5,000 a month for 10 years at 12% grows to about ₹11,61,695. With a 10% step-up every year, the SIP rises to ₹11,790 a month in the final year, you invest ₹9,56,245 in total, and the estimated value grows to about ₹16,87,163.
SIP or lumpsum — which is better?
| Point | SIP | Lumpsum |
|---|---|---|
| How you invest | A fixed amount every month | One large amount at once |
| Market timing | Not needed — you buy at different prices (rupee cost averaging) | Matters more — investing at a market high can hurt returns |
| Best for | Salaried people and regular savers | A bonus, sale proceeds or other one-time money |
| Discipline | Builds a monthly saving habit | Depends on having a large sum available |
Use the One-time (lumpsum) option in the calculator above to compare both.
How are SIP returns taxed?
Tax depends on the type of fund and how long you hold each instalment. With a SIP, every instalment is treated as a separate investment, and units are redeemed on a first-in, first-out basis.
| Fund type | Short-term | Long-term |
|---|---|---|
| Equity funds (65% or more in Indian shares) | Held up to 12 months: 20% | Held over 12 months: 12.5% on gains above ₹1.25 lakh a year |
| Debt funds bought on or after 1 April 2023 | Taxed at your income-tax slab rate, whatever the holding period | |
Tips to get more from your SIP
- Start early — time in the market matters more than the amount.
- Stay invested through market falls — your SIP buys more units when prices are low.
- Step up every year — even a 5–10% annual increase makes a big difference over time.
- Match the fund to your goal — equity funds for goals more than five years away, debt funds for shorter goals.
- Review once a year rather than reacting to daily market news.