SIP Calculator

How to use SIP Calculator

1. Enter the monthly investment amount.
2. Set an expected annual return — and run it again at two or three percentage points lower.
3. Set the duration and read the invested total against the projected value.
4. Returns are assumed constant; real market returns are not, and the sequence matters.
5. The projection is nominal — adjust for inflation to see real purchasing power.
6. Equity fund gains above ₹1.25 lakh a year are taxed at 12.5% long-term.

The number that surprises people is the split

₹10,000 a month for 15 years at 12% is ₹18 lakh invested and roughly ₹50 lakh at the end — so about 64% of the final amount is growth rather than contribution. Extend to 25 years and ₹30 lakh invested becomes around ₹1.9 crore, with contributions now under a sixth of the total. Compounding is not linear in time, which is why starting five years earlier outperforms investing substantially more later.

The assumed rate is an assumption, not a forecast

12% is the conventional figure for Indian equity projections because it approximates long-run index returns, and no fund delivers it smoothly. Real sequences include years of −30% and years of +40%, and the order they arrive in matters for anyone withdrawing. Run the projection at 10% and 14% as well as 12 — if the plan only works at the optimistic figure, it is not a plan. Debt funds and hybrid funds have quite different expectations, typically 6–8%.

Rupee cost averaging is a discipline, not a strategy

Investing a fixed amount monthly buys more units when prices are low and fewer when high, which smooths the average purchase price. Studies consistently find that investing a lump sum immediately beats staging it in, because markets rise more often than they fall — so SIP’s real advantage is behavioural. It makes investing automatic, removes the impulse to time the market, and keeps contributions going during the falls when stopping feels most sensible and is most costly.

Inflation and tax are missing from the headline figure

₹1 crore in 20 years is not ₹1 crore today — at 6% inflation it buys roughly what ₹31 lakh buys now. Project in real terms by using a return net of inflation, or apply an inflation calculator to the result. Equity mutual fund gains above ₹1.25 lakh in a year are taxed at 12.5% long-term, and each SIP instalment has its own holding period, so redeeming a long-running SIP mixes long and short-term gains.