SIP Calculator

How does this SIP calculator work?

The calculator takes three inputs: the amount you invest every month, the annual return you expect, and the number of years. It converts the annual rate into a monthly rate (12% a year becomes 1% a month), counts the total number of instalments, and assumes each instalment is invested at the start of its month and grows at that same monthly rate until the end of the period.

Worked example with the default inputs: ₹5,000 a month for 10 years at 12% gives i = 0.01 and n = 120. The formula produces ₹11,61,695. You would have invested ₹6,00,000, so the projected gain is ₹5,61,695.

The 12% is a nominal rate, and that matters

Because the annual rate is split into twelve equal monthly rates and compounded, "12% a year" in this calculator is really 1% a month, which works out to an effective 12.68% a year. The same conversion turns 10% into 10.47% and 8% into 8.30%. Fund factsheets quote annualised returns (CAGR), so a fund that reports 12% CAGR corresponds to a slightly lower number in this calculator. The difference is small over a few years but noticeable over twenty.

What the calculator assumes

• The same return every single month. Real markets rise and fall, sometimes sharply.
• No missed or delayed instalments and no change in the monthly amount.
• Returns are net of the scheme's expense ratio, which is how fund NAVs are already reported.
• No exit load, no capital gains tax and no inflation adjustment. The taxation section below covers tax.

What ₹5,000 a month could become at different assumed returns

The table applies the formula above to a ₹5,000 monthly SIP at three assumed rates. These are arithmetic outcomes for a constant return, not forecasts, and no fund or category is implied. Use the lower columns for planning and treat the higher ones as upside.

Assumed constant monthly compounding at the stated annual rate, instalment at the start of each month, no tax, no exit load.

Time does most of the work: ₹5,000 a month at an assumed 12%

Doubling the period from 15 to 30 years doubles the amount invested but multiplies the projected value roughly seven times. That is what compounding over a long horizon looks like on paper, and it is why starting early matters more than starting big.

CAGR, XIRR and why your real SIP return looks different

CAGR (compound annual growth rate) describes one lump sum growing from a starting value to an ending value over a number of years. A SIP is not one lump sum. It is dozens or hundreds of separate purchases on different dates, each with a different holding period. The instalment you paid last month has had four weeks to grow, while the first one has had years.

The correct yardstick for such a stream of cash flows is XIRR, the internal rate of return calculated from dated cash flows. Fund statements and most portfolio trackers report XIRR for SIPs. Two habits help when reading your own numbers: do not compare a SIP's absolute return (gain divided by amount invested) with a fund's CAGR, because half your money was invested only recently; and do not expect a 10-year SIP to produce the same rupee gain as a lump sum of the same total invested on day one. The smaller gain is the price of spreading the investment over time.

Rupee cost averaging, with a worked example

A SIP buys a fixed rupee amount each month, so it automatically buys more units when the NAV is low and fewer when it is high. Suppose you invest ₹5,000 for four months and the NAV moves from 50 to 40, back to 50, and then to 62.50.

You hold 405 units for ₹20,000, an average cost of ₹49.38 per unit, even though the simple average of the four NAVs is ₹50.63. At the final NAV of ₹62.50 the holding is worth ₹25,313. The averaging effect is real, but it has limits: it does not protect you if the NAV keeps falling for years, and in a market that only rises a lump sum invested on day one would have done better.

Step-up SIP: growing the instalment with your income

A step-up (or top-up) SIP increases the monthly amount by a fixed percentage every year, typically matched to expected salary increments. Start at ₹5,000 a month, raise it by 10% each year, and assume 12%: over 10 years you invest ₹9,56,245 and the projected value is ₹16,87,163. A flat ₹5,000 SIP over the same period invests ₹6,00,000 for a projected ₹11,61,695. By the tenth year the stepped-up instalment is ₹11,790 a month.

Notice where the extra comes from. The step-up path invests ₹3,56,245 more and ends ₹5,25,468 higher. The advantage is mostly the additional money invested, not any improvement in return, which is exactly why a step-up is useful: it turns future raises into investments before lifestyle spending absorbs them.

SIP versus lump sum

Direct plans, regular plans and the expense ratio

Every open-ended scheme is sold in two plans with the same portfolio and the same fund manager. The regular plan's NAV carries the distributor's commission inside its expense ratio, so the regular NAV grows a little slower than the direct NAV every day. That small daily gap compounds for as long as you stay invested, which over a 15 or 20 year SIP becomes a meaningful difference in the final value. Direct plans have been available since January 2013 and can be bought from the fund house or from platforms that offer them.

Which one to choose is a fair trade-off rather than a trick question. If you select funds yourself and do not need advice, a direct plan keeps more of the return. If a distributor helps you choose, rebalance and stay disciplined, you are paying for that service through the regular plan's higher expense ratio. The exact expense ratio of each plan is printed in the scheme's factsheet and on the fund house website.

Risks the calculator cannot show

• Market risk. The value of equity and debt funds moves with markets and can fall below what you invested. A SIP spreads timing risk; it does not remove it.
• No guaranteed return. The rate you enter is your assumption. Nothing in a mutual fund promises it, and past performance does not indicate future results.
• Category risk. Small-cap and sector funds swing far more than large-cap or index funds, in both directions.
• Sequence risk. A steep fall in the last year or two before you need the money hurts most, because that is when the corpus is largest. Many investors move part of the corpus to debt as the goal date approaches.
• Costs and liquidity. Exit loads, the expense ratio and tax all reduce what you actually receive. Read the scheme information document before investing.

QuickTools India is an educational project and is not a SEBI-registered investment adviser. Nothing on this page is investment advice.

How SIP gains are taxed (as of September 2026)

Mutual fund gains are capital gains. The rules below follow the changes made by the Finance (No. 2) Act, 2024, which apply to redemptions on or after 23 July 2024. Each SIP instalment is a separate purchase with its own date, and when you redeem, the oldest units are treated as sold first.

A 4% health and education cess is added to the tax. Example: if your equity long-term gains in a year total ₹3,00,000, the first ₹1,25,000 is exempt, ₹1,75,000 is taxed at 12.5% (₹21,875), and cess adds ₹875, for a total of ₹22,750. A short-term gain of ₹50,000 would cost ₹10,000 plus ₹400 cess. Units bought before 1 February 2018 use the 31 January 2018 price as their cost under the grandfathering rule. Dividend (IDCW) payouts are added to your income and taxed at slab rate. ELSS units are locked in for three years from each instalment. Debt fund units bought before April 2023 follow older rules, so check with a tax professional before redeeming them. Estimate your slab with our income tax calculator.

How to start a SIP

1. Complete KYC once. You need a PAN and identity and address proof. KYC done with any fund house or registrar is valid across the industry.
2. Match the fund to the goal. Money needed within three years is usually better placed in debt or liquid funds; longer goals are where equity funds are normally used.
3. Pick direct or regular, as explained above, and check the scheme's expense ratio and exit load.
4. Set the amount and date and register a bank mandate (NACH or UPI autopay) so the instalment is debited automatically.
5. Review once a year, step up the amount when income rises, and avoid stopping during market falls, since those are the months that buy the most units.

New to mutual funds? Read our beginner's guide to SIP investing, or compare with a guaranteed option using the PPF calculator.

Frequently Asked Questions