SIP Calculator
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What is a SIP and how does this calculator work?
A Systematic Investment Plan (SIP) lets you invest a fixed amount into a mutual fund every month instead of putting in one large sum. This calculator projects how that monthly amount grows over time using the standard SIP future value formula, applied monthly at your chosen expected annual return.
The SIP formula used
Future Value = P × [(1+r)^n − 1) / r] × (1+r), where P is your monthly investment, r is the monthly rate of return, and n is the total number of months. We add the future value of any existing lumpsum on top, compounded at the same annual rate.
Why returns are never guaranteed
The 8–15% return options reflect long-term historical averages for different fund categories in India — they are not promises. Equity markets fluctuate year to year, and short-term SIP returns can be negative even when the long-term average is positive. Treat the final corpus as a planning estimate, not a guarantee.
SIP vs lumpsum vs recurring deposit
- SIP: Best for salaried earners investing monthly; smooths out market volatility via rupee cost averaging.
- Lumpsum: Can outperform SIP if invested right before a market rise, but carries timing risk.
- Recurring Deposit: Capital is safe but returns are far lower (6-7%) and fully taxable as interest income.
Frequently asked questions
Diversified Indian equity mutual funds have historically returned around 12% per year over the long term, though this is not guaranteed. Conservative debt funds return closer to 7-8%, while small and mid cap funds have returned 15%+ in strong cycles with higher volatility.
SIP works well when you invest regular income and want to average out market volatility. Lumpsum can outperform if timed right before a rally, but timing markets consistently is very difficult — which is why most planners recommend SIP for salaried investors.
No. Equity mutual fund gains held over one year are taxed as long-term capital gains; gains under one year are taxed as short-term capital gains. ELSS SIPs additionally qualify for an 80C deduction up to ₹1.5 lakh — see our 80C tax saving calculator.