SIP Calculator
About SIP (Systematic Investment Plan)
₹500
Minimum Monthly SIP Amount
10–13%
Typical Equity SIP CAGR (10Y+)
Any
Tenure (No Lock-in for Open Funds)
LTCG
12.5% Tax on Gains >₹1.25L (Equity)
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund every month. It builds discipline, averages your purchase cost through market cycles (rupee cost averaging), and harnesses the power of compounding over long periods. SIPs can be started with as little as ₹500/month and can be paused or stopped at any time (except ELSS funds with 3-year lock-in).
How is SIP return calculated?
SIP uses the future value of an annuity-due formula, where each monthly instalment is assumed to be invested at the start of the month and compounds until the end of the tenure. The formula is:
FV = P × [(1 + r)n − 1] ÷ r × (1 + r)
where P = monthly SIP amount, r = monthly return rate (annual rate ÷ 12), and n = total number of months. The calculator above applies this formula exactly to every input combination.
Example: ₹10,000/month for 20 years at 12%
At a 12% annual return (1% per month), investing ₹10,000 every month for 20 years produces:
- Total invested: ₹24,00,000 (₹10,000 × 240 months)
- Estimated maturity value: ₹99,91,479
- Wealth gain: ₹75,91,479
The wealth gain of ~₹75.9 lakh is more than 3× the invested amount, illustrating the power of compounding over long periods.
SIP vs Lump Sum — which is better?
Both have merit depending on market conditions and investor temperament. SIP averages your purchase cost over time (rupee cost averaging), reducing the impact of market volatility. A lump sum can outperform SIP in a consistently rising market, but requires the ability to time entry well. For most retail investors without market-timing expertise, SIP is the recommended approach.
| Feature | SIP | Lump Sum |
|---|---|---|
| Market timing risk | Low (averaged over time) | High (single entry point) |
| Discipline required | Built-in (auto-debit) | One-time decision |
| Best in rising markets | Good | Better |
| Best in volatile markets | Better | Poor |
| Suitable for | Regular salaried investors | Investors with large idle surplus |
| LTCG trigger | Per instalment (1-year holding each) | Single date (1-year from investment) |
Frequently Asked Questions
What is SIP and how does this calculator work?
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund every month. This calculator uses the compound interest formula FV = P × [(1+r)^n – 1] / r × (1+r), where P = monthly amount, r = monthly return rate, and n = total months. It shows your projected maturity value and year-by-year portfolio growth.
What is a realistic expected return for a mutual fund SIP?
Historically, large-cap equity mutual funds in India have delivered 10–13% CAGR over 10+ year periods. Mid-cap and small-cap funds have returned 12–18% over long horizons but with higher volatility. Debt funds typically return 6–8%. For conservative planning, use 10–12% for equity SIPs and 6–7% for debt.
How is SIP return calculated — formula?
SIP return uses the future value of an annuity-due formula: FV = P × [(1+r)^n – 1] / r × (1+r), where P is the monthly SIP amount, r is the monthly return rate (annual rate ÷ 12), and n is the number of months. The result assumes all investments are made at the start of each month.
Is SIP better than lump sum for equity mutual funds?
SIP is generally preferred for equity because it averages purchase cost over time (rupee cost averaging), reducing the impact of market volatility. Lump sum can outperform SIP in a consistently rising market. For most retail investors without the ability to time the market, SIP is the recommended approach.
Can I change my SIP amount mid-way through the tenure?
Yes. Most mutual funds allow you to increase (step-up), decrease, or pause your SIP. A step-up SIP — where you increase the monthly amount by 10–15% each year — can significantly boost your final corpus. The calculator currently assumes a fixed monthly amount throughout the tenure.
Is SIP income taxable in India?
Equity SIP gains held over 1 year are Long Term Capital Gains (LTCG), taxed at 12.5% above ₹1.25 lakh per year (post Budget 2024). Short-term gains (held under 1 year) are taxed at 20%. Debt fund gains are taxed as per your income tax slab regardless of holding period.
Are SIP returns guaranteed?
No. SIP calculator shows estimated returns based on assumed rate. Past performance doesn't guarantee future results. Market-linked.
Can I increase my SIP amount later?
Yes! Use Top-up SIP to increase investment by 10-50% annually. Most powerful wealth creation strategy.
Ready to turn this into a real plan?
Artha Auto-Plan builds your complete financial roadmap — SIPs, insurance, emergency fund — personalised to your income and goals.
Disclaimer: Returns are not guaranteed or assured. The calculator's accuracy is not warranted. Before making any investment decisions, please seek advice from your financial advisors.
