Maturity value · Wealth gain · Step-up SIP · Inflation-adjusted returns · Illustrative estimates only
A SIP (Systematic Investment Plan) is a method of investing a fixed amount in a mutual fund at regular intervals — typically every month — instead of investing a single large sum at once. Each instalment buys units at that month's prevailing NAV (Net Asset Value), so your average purchase cost is smoothed out across market ups and downs over time.
Type your monthly SIP amount or use quick preset buttons (1K, 3K, 5K, 10K, 25K, 50K).
Select a fund category preset or enter your own assumed return, then set your investment duration in years.
Enter an annual increase percentage to see how a growing SIP accelerates your final corpus.
Enter a target amount to find the monthly SIP or the number of years needed to reach it.
SIP maturity value is calculated using the future value of an annuity formula, assuming monthly compounding:
| Variable | Meaning | How to find it | Example |
|---|---|---|---|
| P | Monthly SIP instalment amount | The amount you plan to invest every month | ₹10,000 |
| i | Monthly rate of return (annual rate ÷ 12 ÷ 100) | Assumed annual return rate for the fund category | 12% p.a. → 0.01 |
| n | Total number of monthly instalments | Tenure in years × 12 | 15 yrs → 180 |
| M | Maturity value | Calculated output | ₹50,29,000 |
Inputs: P = ₹10,000 | Rate = 12% p.a. | Tenure = 15 years (180 months)
This is the same underlying formula used for any monthly recurring investment, including step-up SIPs (where the instalment increases each year) and recurring deposits, though the assumed return rate and risk profile differ significantly between equity SIPs and bank RDs.
In a SIP, every monthly instalment starts compounding independently from the date it is invested. The instalment from Month 1 has the most time to grow — it compounds for the entire remaining tenure — while the instalment from the final month barely compounds at all before maturity. This is why the bulk of SIP wealth creation happens in the later years of a long tenure, even though every monthly amount is identical.
| Tenure | Total Invested | Maturity Value | Est. Wealth Gain |
|---|---|---|---|
| 5 years | ₹6,00,000 | ₹8,24,939 | ₹2,24,939 |
| 10 years | ₹12,00,000 | ₹23,23,391 | ₹11,23,391 |
| 15 years | ₹18,00,000 | ₹50,45,760 | ₹32,45,760 |
| 20 years | ₹24,00,000 | ₹99,91,479 | ₹75,91,479 |
Notice how invested amount grows linearly (it just doubles when tenure doubles), but the wealth gain grows much faster — this gap is the visible effect of compounding accelerating over a longer horizon.
A fixed SIP instalment automatically buys more units when the NAV is low and fewer when it's high. Over time this averages your purchase cost and removes the risk of investing everything at one bad entry point.
More units bought as NAV drops, lowering your average cost — a downturn becomes a long-term advantage, not just a paper loss.
Fewer new units bought, but existing holdings gain value — the wealth-building effect of an ongoing SIP is most visible here.
Repeated up-down cycles let a SIP accumulate units cheaply at multiple low points — where rupee cost averaging adds the most relative value.
A lumpsum has one entry price and full timing risk. Spreading the same amount across months trades some upside for meaningfully less downside risk.
SIP rewards patience more than any other single factor. As shown in the table above, the wealth gain in the final five years of a 20-year SIP is larger than the entire wealth gain of a 10-year SIP with the same monthly amount — because more capital has accumulated and has more time to compound on itself.
If you're deciding between the two, the lumpsum calculator lets you model a one-time investment side by side with this SIP projection using the same assumed rate and tenure.
A SIP maturity value 20 years from now will buy considerably less than the same rupee figure today, because prices rise every year. India's CPI has averaged roughly 5–6% historically, meaning a goal worth ₹1 crore today effectively needs to be worth ₹3.2–3.6 crore in nominal terms in 20 years just to retain the same purchasing power.
| Fund Category | Typical Long-Term Assumption | Relative Risk |
|---|---|---|
| Debt Funds | 6–7% p.a. | Low |
| Balanced / Hybrid Funds | 9–10% p.a. | Moderate |
| Large Cap Equity Funds | 11–12% p.a. | Moderately High |
| Mid/Small Cap Equity Funds | 13–15% p.a. | High |
Work backward from a specific target — a child's education, a house down payment, retirement — to find the monthly SIP needed at your assumed rate and timeline.
Increasing your SIP every year in line with salary growth lets you invest more without feeling the pinch, and meaningfully accelerates the final corpus. See the step-up SIP calculator.
Splitting SIPs across large-cap, mid-cap, and debt funds based on your risk profile and goal timeline diversifies risk compared to a single-category SIP.
Pairing an ongoing SIP with occasional STPs from a debt fund lets you deploy windfalls gradually into the same goal without disrupting your monthly investing habit.
Each SIP instalment is treated as a separate investment for tax purposes — it has its own purchase date and NAV, and its own holding period is calculated independently when you redeem.
| Fund Type | Holding Period for LTCG | Short-Term Tax (STCG) | Long-Term Tax (LTCG) |
|---|---|---|---|
| Equity Funds (≥65% equity) | More than 12 months per instalment | 20% (per current rules) | 12.5% above ₹1.25 lakh gains per year |
| Debt Funds | No indexation benefit; taxed at slab rate regardless of holding period (current rules) | Taxed at your income tax slab rate | Taxed at your income tax slab rate |
A ₹15,000 monthly SIP at an assumed 11% p.a. for 7 years builds a corpus of roughly ₹18.3 lakh against a total investment of ₹12.6 lakh — useful as a down payment fund that needs to grow faster than a recurring deposit but doesn't need decades to mature.
Starting a ₹8,000 monthly SIP at the child's birth, assuming 12% p.a. for 18 years, grows to approximately ₹56.6 lakh against ₹17.3 lakh invested — but the real (inflation-adjusted) value should be checked against the future cost of education, which often rises faster than general inflation.
A 30-year-old investing ₹20,000 monthly at an assumed 12% p.a. until age 60 (30 years) accumulates approximately ₹6.99 crore against ₹72 lakh invested — illustrating why starting a retirement SIP in your 20s or early 30s has an outsized impact compared to starting a decade later.
SIP maturity value is calculated using the future value of an annuity formula: M = P × [(1+i)ⁿ − 1] ÷ i × (1+i), where P is the monthly instalment, i is the monthly rate of return (annual rate ÷ 12 ÷ 100), and n is the total number of instalments. Each monthly instalment compounds independently from its own investment date, which is why earlier instalments contribute disproportionately more to the final corpus.
Rupee cost averaging is the natural result of investing a fixed amount every month regardless of market level — your instalment automatically buys more units when the NAV is low and fewer units when the NAV is high. Over time, this averages out your purchase cost per unit and reduces the risk of investing a large sum at a single unfavourable price point.
Neither is universally better. SIP tends to outperform in flat or volatile/sideways markets because of rupee cost averaging, and suits investing out of regular monthly income. Lumpsum tends to outperform during sustained bull markets because the entire amount compounds from day one, and suits windfalls like bonuses or inheritance. Most investors benefit from using SIP for ongoing income and lumpsum for one-time amounts.
This depends on the fund category: debt funds have historically returned around 6–7% p.a., balanced/hybrid funds around 9–10%, large-cap equity funds around 11–12%, and mid/small-cap funds 13–15% over long periods. These are historical averages, not guarantees — for planning purposes, it is safer to use a conservative assumption such as 10–12% for equity-oriented SIPs.
CAGR assumes a single lumpsum investment growing at a constant rate, so it understates a SIP's true return because it ignores the staggered timing of each instalment. XIRR (Extended Internal Rate of Return) accounts for the exact date and amount of every cash flow, making it the more accurate measure of a SIP's annualised return. XIRR is typically slightly higher than simple CAGR for the same SIP because early instalments have compounded for longer.
Each SIP instalment is treated as a separate investment with its own purchase date for tax purposes. For equity funds, instalments held over 12 months qualify for long-term capital gains (LTCG) tax; instalments held under 12 months are taxed as short-term capital gains (STCG) at a higher rate. Debt fund SIPs, under current rules, are taxed at your income slab rate regardless of holding period. Redemptions typically follow a FIFO (First In, First Out) basis.
Missing one instalment usually has minimal long-term impact, but most banks may charge a minor penalty for a failed auto-debit. Stopping a SIP altogether for an extended period, however, means losing not just that month's investment but all the future compounding it would have generated — which is why staying invested continuously matters more than the exact monthly amount.
Yes — most fund houses allow you to increase your SIP amount at any time, or set up an automatic annual increase known as a Step-Up SIP. Increasing your SIP in line with salary growth, even by 10% a year, meaningfully accelerates your final corpus compared to keeping the same amount fixed for the entire tenure.
A SIP calculator is mathematically precise for the constant monthly rate of return you enter, but actual market returns fluctuate significantly year to year and month to month. Treat the calculator output as a directional planning estimate, not a guaranteed maturity figure, and consider testing the calculation at a few different assumed rates.
Use the Goal Planner feature to work backward from your target amount: enter the goal value, your assumed annual return, and your time horizon, and the calculator will compute the required monthly SIP. Remember to use the inflation-adjusted version of your goal amount, not today's cost, especially for targets more than 10 years away.
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