SIP Calculator
Calculate how your monthly mutual fund investments compound into wealth with optional annual step-ups.
| Year | Monthly SIP | Yearly Deposit | Total Invested | Expected Balance |
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Notice: Mutual fund investments are subject to market risks. Past performance and return rates are hypothetical projections for illustrative and educational purposes only. GrabCalc is an independent publisher, not an AMFI-registered distributor or SEBI financial advisor.
How to Use This Calculator
- Set your monthly installment: Type your planned monthly investment (e.g. ₹5,000) or tap any quick preset chip.
- Pick expected return & timeline: Enter your expected annual return (11%–13% is typical for broad Indian equity index and flexi-cap funds) and select your investment horizon in years.
- Add an annual step-up: Optionally increase your SIP every year by a percentage (like 10%) or a fixed amount (like +₹1,000) to match your annual salary appraisals.
- Review maturity in Lakhs & Crores: Instantly check your total invested sum, accumulated wealth gain, and year-by-year compounding schedule.
The Formula
Mutual fund SIPs are calculated as an annuity due, because each monthly installment is invested at the beginning of the month and immediately begins compounding.
- M: Expected maturity amount at the end of the investment horizon.
- P: Monthly investment installment amount.
- i: Periodic monthly interest rate, calculated as annual return rate divided by 12 (
r ÷ 12). - n: Total number of compounding monthly payments (
Years × 12).
With an annual step-up, the installment amount P increases once every 12 months. The calculator runs a monthly compound schedule so each rupee compounds for its exact duration in the market.
Example
Here is a concrete scenario showing how a disciplined ₹5,000 monthly SIP multiplies over a 10-year horizon in an equity index fund:
Walking through the arithmetic step by step:
- Calculate total out-of-pocket investment:
120 payments × ₹5,000 = ₹6,00,000 (₹6.00 Lakh) - Calculate compounding growth factor:
((1.01)120 − 1) ÷ 0.01 × 1.01 = 232.339 - Compute final maturity value:
₹5,000 × 232.339 = ₹11,61,695.38 (≈ ₹11.62 Lakh) - Determine net wealth gained purely from returns:
₹11,61,695.38 − ₹6,00,000 = ₹5,61,695.38 (≈ ₹5.62 Lakh)
Your money nearly doubles over 10 years, with compounded gains generating almost half of your final pot without you ever having to time the market.
Frequently Asked Questions
Why is SIP usually better than investing a lump sum?
Lump-sum investing forces you to guess whether the stock market is high or low on the day you buy. An SIP spreads your purchase across every peak and dip automatically through rupee-cost averaging. You buy fewer fund units when the market rallies and more units when prices dip, taking emotion out of investing.
How much difference does an annual step-up really make?
A 10% annual step-up on a ₹5,000 monthly SIP over 10 years turns an ending pot of ₹11.62 Lakh into ₹16.87 Lakh. That is more than ₹5.25 Lakh in extra wealth simply by raising your contribution in line with your annual salary appraisals.
What was your first monthly SIP, and how did you choose your fund?
I started with ₹2,000 a month in a broad Nifty 50 index fund right after starting my first desk job. Colleagues were chasing sectoral trends and trading tips, but I wanted something simple that didn't require following stock news every evening. Sticking with a low-cost index fund let me automate the process directly on payday.
Do you step up your SIP amounts every year or keep them fixed?
I always try to bump up my SIP contributions by 10% whenever annual appraisal letters arrive. Doing it right when the increment takes effect prevents lifestyle creep from swallowing the difference. Increasing a ₹5,000 SIP by just ₹500 a month feels barely noticeable from day to day, but it builds substantial extra wealth over five or ten years.
How are mutual fund SIP returns taxed in India?
Under current Indian income tax regulations (Finance Act 2024), equity mutual fund gains held for over 12 months are classified as Long-Term Capital Gains (LTCG) and taxed at 12.5% on profits exceeding ₹1.25 Lakh per financial year. Units held for 12 months or less are Short-Term Capital Gains (STCG) taxed at 20%. Because each monthly SIP installment purchases units on a different calendar date, the 1-year holding clock applies separately to every individual installment.
What is the difference between Direct and Regular plans?
Direct mutual fund plans carry zero distributor commission, giving them an expense ratio 0.5% to 1.5% lower than Regular plans every single year. Over a 15-year horizon, that small percentage difference easily compounds into several lakhs of extra savings remaining in your account.