Educational Purpose Only: This calculator provides estimates for informational and educational purposes. Results should not be considered professional financial, tax, or legal advice. Learn more about our Editorial Policy.
Step-Up SIP (Top-up)
Increase investment annually
Adjust for Inflation
Show returns in today's value
Projected Corpus Amount
₹11.62 L
Invested Amount
₹6.00 L
Wealth Gained
₹5.62 L
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan, commonly known as SIP, is a disciplined way to invest in mutual funds. Instead of putting a large sum of money into the market at once, you invest a smaller, fixed amount every month. This approach reduces the impact of market volatility through a concept called rupee-cost averaging — you buy more units when prices are low and fewer when prices are high, bringing down your average cost per unit over time.
SIPs are popular among salaried individuals because they align naturally with a monthly income cycle. You can start with as little as ₹500 per month, making them accessible to virtually every investor.
How to use this SIP calculator
- Monthly Investment: Enter the amount you plan to invest every month. You can use the slider or type directly into the input field.
- Expected Annual Return: Enter the annual return rate you expect from your mutual fund. Equity funds have historically delivered 10–15% per year over long periods, though past performance does not guarantee future results.
- Investment Period: Enter the number of years for which you plan to stay invested. The longer your investment horizon, the more powerfully compounding works in your favour.
- The calculator instantly shows your Total Invested amount, Estimated Returns, and the final Total Value of your investment.
How is SIP return calculated?
The future value of a SIP is calculated using the following formula:
- M — Maturity amount (total value at end of investment period)
- P — Monthly investment amount
- r — Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n — Total number of monthly instalments (years × 12)
For example, if you invest ₹5,000 per month for 10 years at 12% per annum, the monthly rate is 1% and n is 120. The formula gives a maturity value of approximately ₹11.6 lakh against a total investment of ₹6 lakh — meaning your money nearly doubled through compounding alone.
Benefits of investing through SIP
Power of Compounding
Returns earned on your investment are reinvested, allowing your wealth to grow exponentially over time. The longer you stay invested, the greater this effect.
Rupee-Cost Averaging
By investing a fixed amount every month, you automatically buy more units when markets fall and fewer when markets rise, averaging out your purchase cost.
Financial Discipline
SIPs create a habit of regular saving. Since the amount is deducted automatically from your bank account, it removes the temptation to spend before investing.
Flexibility
You can start, pause, increase, or stop a SIP at any time without penalties. This flexibility makes SIPs suitable for investors at any life stage.
SIP investment scenarios for Indian investors
Below are three concrete examples using a 12% annual return assumption — the long-run average of diversified large-cap equity mutual funds in India. Actual returns vary and are not guaranteed.
Young professional — early starter
₹2,000/month
20 years
₹4.8 lakh
≈ ₹20 lakh (4.2×)
Starting early at ₹2,000/month beats investing ₹5,000/month for 10 years. Time is the most powerful variable in compounding.
Salaried employee — mid-career
₹5,000/month
15 years
₹9 lakh
≈ ₹25 lakh (2.8×)
A ₹5,000 SIP over 15 years grows the investment nearly 3x. Adding a 10% annual step-up (Step-Up SIP) pushes maturity to approximately ₹40 lakh.
Senior professional — wealth building
₹10,000/month
30 years
₹36 lakh
≈ ₹3.5 crore (9.7×)
Over 30 years, compounding dominates. The ₹36 lakh invested nearly 10x — demonstrating why a long horizon matters more than the monthly amount.
Tax on SIP returns — what you actually keep
Mutual fund returns from equity funds are subject to capital gains tax. Understanding this helps you estimate your actual post-tax wealth from a SIP.
| Holding Period | Tax Type | Rate | Exemption |
|---|---|---|---|
| Under 12 months | Short-Term Capital Gain (STCG) | 20% | None |
| 12 months or more | Long-Term Capital Gain (LTCG) | 12.5% | First ₹1.25 lakh/year is tax-free |
For a long-term SIP investor redeeming annually and staying within ₹1.25 lakh of gains per year, the effective tax on SIP returns is zero. Most investors with a ₹3,000–8,000/month SIP won't exceed this threshold in the early years. Tax on debt fund gains is added to your income and taxed at your slab rate.
Practical tip: For ELSS (Equity Linked Savings Scheme) SIPs, there is a 3-year lock-in per instalment. Beyond the lock-in, LTCG rules apply. ELSS also qualifies for Section 80C deduction up to ₹1.5 lakh, making it one of the best tax-efficient SIP options for old-regime taxpayers.
SIP vs Lump Sum Investment
A lump-sum investment means putting your entire available capital into a fund at one time. While this can work well in a rising market, it carries more risk if you invest just before a correction. SIP spreads your entry points over many months, which reduces timing risk and is generally preferred by investors who receive a regular salary or want to avoid market timing.
If you have a large windfall (like a bonus or inheritance), a combination approach works well — invest part as a lump sum and part through a SIP to balance opportunity and risk.
Frequently Asked Questions
What is the minimum amount to start a SIP?
Most mutual funds allow you to start a SIP with as little as ₹100 to ₹500 per month. Some funds have higher minimums, but there is no upper limit on how much you can invest.
Is SIP risk-free?
No. SIPs in equity mutual funds carry market risk. However, investing over a long period of 5 years or more significantly reduces the probability of negative returns, as market fluctuations tend to average out over time.
What return rate should I use in the calculator?
For equity mutual funds, a return assumption of 10–12% per annum is commonly used for long-term planning. For debt or balanced funds, 6–8% is more realistic. Always use conservative estimates to avoid over-projecting wealth.
Can I change my SIP amount after starting?
Yes. You can increase your SIP amount (called a step-up SIP), decrease it, or even pause it temporarily. Most fund houses and investment apps allow these changes with no additional charges.
Is SIP the same as a recurring deposit (RD)?
No. A Recurring Deposit is a bank product with guaranteed, fixed returns and capital protection. A SIP invests in market-linked mutual funds, which offer higher potential returns but with associated risk. RDs suit risk-averse investors while SIPs suit those willing to accept some volatility for better long-term growth.
Related Calculators
This calculator is for educational and illustrative purposes only. Mutual fund investments are subject to market risks. Past performance does not guarantee future returns. Please read all scheme-related documents carefully before investing.
Why this calculator is useful
A Systematic Investment Plan (SIP) lets you invest a fixed amount every month into a mutual fund. Use this calculator to see how your regular investments grow over time through the power of compounding. This page is designed to help readers understand the financial scenario clearly, compare the numbers, and make better decisions with practical context.
Why this matters
A SIP estimate helps you understand how regular investing can grow over time and how small monthly contributions can add up.
What to review
Use realistic return expectations and a consistent monthly contribution so the projection remains useful for budgeting.
How to use the result
Compare the projection with your short-term and long-term goals to choose a monthly amount that feels sustainable.
Quick examples and best practices
- Use realistic inputs: Enter values that match your real income, loan terms, or investment profile so the result feels practical.
- Compare scenarios: Change one variable at a time to see how the result shifts before making a decision.
- Verify major choices: For high-stakes decisions, cross-check the output with documents, spreadsheets, or a qualified professional.
Common questions
How does a SIP calculator work?
A SIP calculator uses the compound interest formula: M = P × [(1 + r)^n – 1] / r × (1 + r), where P is the monthly investment, r is the monthly rate of return, and n is the number of months. It shows your total invested amount, estimated returns, and final maturity value.
What is a good SIP return rate to assume?
Historically, equity mutual funds in India have delivered 10–15% annual returns over long periods. For conservative planning, assume 10–12% per annum. Returns are not guaranteed and vary with market conditions.
Can I increase my SIP amount over time?
Yes. A Step-Up SIP lets you increase your monthly investment by a fixed percentage each year. Use our Step-Up SIP Calculator to see how annual increments significantly boost your final corpus.
What is the minimum amount to start a SIP?
Most mutual funds allow you to start a SIP with as little as ₹100 to ₹500 per month. Some funds have higher minimums, but there is no upper limit on how much you can invest.
Is SIP risk-free?
No. SIPs in equity mutual funds carry market risk. However, investing over a long period of 5 years or more significantly reduces the probability of negative returns, as market fluctuations tend to average out over time.
What return rate should I use in the calculator?
For equity mutual funds, a return assumption of 10–12% per annum is commonly used for long-term planning. For debt or balanced funds, 6–8% is more realistic. Always use conservative estimates to avoid over-projecting wealth.
Can I change my SIP amount after starting?
Yes. You can increase your SIP amount (called a step-up SIP), decrease it, or even pause it temporarily. Most fund houses and investment apps allow these changes with no additional charges.
Is SIP the same as a recurring deposit (RD)?
No. A Recurring Deposit is a bank product with guaranteed, fixed returns and capital protection. A SIP invests in market-linked mutual funds, which offer higher potential returns but with associated risk. RDs suit risk-averse investors while SIPs suit those willing to accept some volatility for better long-term growth.