📈 SIP Calculator
A systematic investment plan puts a fixed amount into a fund every month. This projects what it matures to, splits the result between your money and the returns, and lets you add an annual step-up if your contribution rises with your income.
How a systematic investment plan builds a corpus
A SIP invests a fixed amount on a fixed date every month. Each instalment buys units at whatever the price is that day, so you automatically buy more units when the market is down and fewer when it is up. That is rupee-cost averaging, and the main thing it averages is your behaviour.
M = P × [ ((1+i)n − 1) / i ] × (1+i)
P is the monthly instalment, i the monthly rate of return and n the number of instalments. The trailing (1+i) applies because SIP instalments are invested at the start of each period rather than the end.
Time does the heavy lifting
| Years | Invested | Maturity value | Growth share |
|---|---|---|---|
| 5 | ₹6,00,000 | ₹8,25,000 | 27% |
| 10 | ₹12,00,000 | ₹23,23,000 | 48% |
| 15 | ₹18,00,000 | ₹49,96,000 | 64% |
| 20 | ₹24,00,000 | ₹99,91,000 | 76% |
| 25 | ₹30,00,000 | ₹1,89,76,000 | 84% |
Doubling the period from 10 to 20 years doubles what you invest and more than quadruples what you end with. By year 25, five sixths of the corpus is growth. This is why starting five years earlier is worth far more than contributing 20% more.
Step-up SIP
A step-up, or top-up, SIP raises the instalment by a fixed percentage each year, usually matching your salary growth. On the fifteen-year example above, a 10% annual step-up takes the maturity value from ₹49.96 lakh to about ₹83 lakh, because the later instalments are much larger and the early ones still had the full runway.
A step-up is the single highest-return change most SIP investors can make, and it costs nothing today. Setting it at the same rate as your expected pay rise means your investing grows with your income rather than your spending doing it.
SIP against a lumpsum
At a steady assumed return, investing the whole amount today always wins, because every rupee compounds for longer. The lumpsum calculator runs that comparison directly. What the SIP buys is protection against bad timing: if the market falls 30% in the first year, the lumpsum investor is down 30% on everything while the SIP investor has most of their money still to deploy at lower prices.
In practice the choice is usually made for you. Most people invest from income as it arrives, which is a SIP by definition. A lumpsum question only arises with a bonus, an inheritance or a maturing deposit.
What return to assume
Twelve per cent is the conventional figure used in Indian SIP illustrations, based on long-run equity index returns. It is a reasonable planning assumption and a terrible guarantee. Equity returns arrive in lumps: a decade can deliver 18% a year and the next one 6%. Debt funds will return considerably less. Running the projection at 10% as well as 12% shows you how sensitive the plan is, and it usually is.
A worked example
₹15,000 a month for 18 years at 11%, with a 7% annual step-up. Without the step-up the corpus reaches about ₹1.13 crore on ₹32.4 lakh invested. With it, the final monthly instalment is around ₹49,000 and the corpus reaches roughly ₹1.84 crore on ₹61 lakh invested. The step-up adds 63% more money and 63% more corpus, with the compounding doing the rest.
Once you have this figure, the lumpsum calculator is where it usually goes next. the compound interest calculator is the related one people reach for afterwards.
Frequently Asked Questions (FAQs)
What return should I assume for a SIP?
Ten to twelve per cent a year is the usual assumption for a diversified equity fund over a long horizon, based on historical index returns. Use 12% for an optimistic case and 10% for a realistic one, and run both. Debt funds should be modelled far lower.
Is SIP better than a lumpsum investment?
At a steady return, no: a lumpsum compounds for longer and ends higher. SIP wins when markets fall early in the period, and it wins in practice because it removes the timing decision and matches how income actually arrives.
What is a step-up SIP?
One where the monthly instalment rises by a set percentage each year, usually in line with your salary. It is the highest-leverage adjustment available: a 10% annual step-up can increase a fifteen-year corpus by two thirds compared with a flat SIP.
Can I stop or pause a SIP?
Yes, almost all SIPs can be paused or stopped without penalty, which is one of their advantages over locked products. Stopping during a market fall is the one time it reliably costs you, because that is when the instalments are buying the most units.
Does this account for tax and expense ratios?
No. It projects gross returns. A fund charging 1.2% a year effectively reduces your return by that much, and capital gains tax applies on redemption at a rate that depends on the fund type and holding period. Reduce the assumed return by the expense ratio for a more honest figure.
What is XIRR and why does it differ from my assumed return?
XIRR is the actual annualised return on a series of irregular cash flows, which is what a SIP produces. Because each instalment is invested for a different length of time, the XIRR of a SIP is not the same as the fund's point-to-point return, and it is the number that reflects what you personally earned.