SIP Calculator
Project what your monthly investment could grow into, model an annual step-up, and see the year-by-year build-up of your corpus.
| Year | Invested this year | Total invested | Value at year end | Gains |
|---|
How a Systematic Investment Plan works
A Systematic Investment Plan, usually shortened to SIP, means investing a fixed amount in a mutual fund at regular intervals rather than putting in a large sum at once. A set amount leaves your bank account on a chosen date each month and buys units at whatever the Net Asset Value happens to be that day.
Because the price varies, you end up buying more units when markets fall and fewer when they rise. Over many months this averages out your purchase cost, a mechanism known as rupee cost averaging. It removes the need to guess whether today is a good day to invest.
The SIP formula
A ₹15,000 monthly SIP at an assumed 12% annual return over 15 years works out to roughly ₹75,69,000. You would have contributed ₹27,00,000 of that, with the remaining ₹48,69,000 coming from compounding.
Why time matters more than amount
Compounding rewards patience disproportionately. Here is what a ₹10,000 monthly SIP at an assumed 12% return produces over different periods:
| Period | Total invested | Projected value | Gains | Multiple |
|---|---|---|---|---|
| 5 years | ₹6,00,000 | ₹8,25,000 | ₹2,25,000 | 1.4x |
| 10 years | ₹12,00,000 | ₹23,23,000 | ₹11,23,000 | 1.9x |
| 15 years | ₹18,00,000 | ₹50,46,000 | ₹32,46,000 | 2.8x |
| 20 years | ₹24,00,000 | ₹99,91,000 | ₹75,91,000 | 4.2x |
| 25 years | ₹30,00,000 | ₹1,89,76,000 | ₹1,59,76,000 | 6.3x |
| 30 years | ₹36,00,000 | ₹3,52,99,000 | ₹3,16,99,000 | 9.8x |
Doubling the period from 15 to 30 years does not double the outcome. It multiplies it roughly seven times, because the returns themselves start generating returns.
Step-up SIP
A step-up SIP, sometimes called a top-up SIP, raises your contribution by a fixed percentage each year. If you start at ₹10,000 with a 10% annual step-up, year two becomes ₹11,000, year three ₹12,100, and so on. Since most people's income rises over time, this keeps your investing in step with your earning.
| Step-up rate | Total invested over 20 years | Projected value at 12% |
|---|---|---|
| No step-up | ₹24,00,000 | ₹99,91,000 |
| 5% each year | ₹39,68,000 | ₹1,48,72,000 |
| 10% each year | ₹68,73,000 | ₹2,27,26,000 |
| 15% each year | ₹1,22,93,000 | ₹3,58,42,000 |
SIP compared with a lump sum
| Aspect | SIP | Lump sum |
|---|---|---|
| How you invest | Fixed amount each month | Entire amount in one go |
| Timing risk | Spread across many entry points | Concentrated on a single day |
| Suits | Salaried investors building wealth from income | Bonuses, maturity proceeds, inheritance |
| Behaviour | Automatic, builds discipline | Requires conviction to act |
| Typical minimum | ₹100 to ₹500 a month | ₹1,000 to ₹5,000 |
| In a rising market | Averages into higher prices | Captures the full run from day one |
Getting the most from your SIP
- Start with whatever you can sustain. Consistency beats size in the early years.
- Set the debit date shortly after your salary credit so the money leaves before you spend it.
- Increase the amount every time your income rises, even by a small percentage.
- Keep going through market falls. Those are the months your money buys the most units.
- Give equity SIPs at least seven years. Shorter horizons belong in debt funds or FDs.
- Review the fund once a year against its category, not against a headline number.
- Avoid stopping a SIP to time the market. Missing recoveries costs more than sitting through falls.
How mutual fund gains are taxed
| Fund type | Holding period | Tax treatment |
|---|---|---|
| Equity funds | Up to 12 months | Short-term gains taxed at 20% |
| Equity funds | Over 12 months | Long-term gains above ₹1,25,000 a year taxed at 12.5% |
| Debt funds | Any period | Taxed at your slab rate |
| ELSS | 3-year lock-in | Same as equity, plus 80C benefit under the old regime |
Each SIP instalment has its own holding period, so units bought eleven months ago are still short-term even if you started the SIP years earlier.
Returns are projections, not promises. The percentage you enter is an assumption. Actual mutual fund returns depend on market conditions and can be negative over short periods. Past performance does not indicate future results. Read the scheme documents before investing.
Frequently asked questions
A Systematic Investment Plan means investing a fixed amount in a mutual fund at regular intervals, usually monthly. The amount is auto-debited and buys units at the prevailing NAV. Because prices vary, you buy more units when markets fall and fewer when they rise, which averages your cost over time.
Many funds now accept SIPs from as little as 100 rupees a month, though 500 is the more common minimum. Starting small and increasing later works better than waiting until you can afford a large amount.
Neither is universally better. SIP spreads your entry across many price points, which reduces timing risk and suits regular income. A lump sum captures the full run if markets rise from the day you invest, which suits bonuses or maturity proceeds. Many investors use both.
Equity funds have historically delivered roughly 11% to 14% annualised over long periods, but any single year can be sharply negative. Model a conservative 10% and an optimistic 14% rather than treating one figure as certain. Returns are never guaranteed.
A step-up or top-up SIP raises your contribution by a set percentage each year. Starting at 10,000 with a 10% annual step-up means 11,000 in year two and 12,100 in year three. Since most incomes rise over time, this keeps your investing aligned with your earning.
Each instalment has its own holding period. Equity units held over 12 months attract long-term capital gains tax at 12.5% on gains above 1,25,000 a year. Units held under 12 months attract short-term gains tax at 20%. Debt fund gains are taxed at your slab rate.