How is SIP return calculated?

SIP future value = P × [((1+r)^n − 1) / r] × (1+r), where P is monthly investment, r is expected monthly return, and n is number of months.

Is SIP return guaranteed?

No. SIP returns depend on market performance of the underlying mutual fund and are not guaranteed. This calculator shows an illustrative estimate only.

A Step-up SIP increases your monthly investment amount every year, typically matching salary increments, helping you build a larger corpus faster.

SIP Calculator

See how a monthly SIP in mutual funds can grow into real wealth over time.

Monthly Investment ₹5,000

₹

Expected Annual Return 12%

Investment Duration 10 Years

Yrs

Step-up SIP (annual increase)

None

10%

15%

₹11,61,695

Estimated Wealth Gained

Total Invested₹6,00,000

Wealth Gain (Returns)₹5,61,695

Maturity Value₹11,61,695

How SIP Compounding Works

A Systematic Investment Plan (SIP) lets you invest a fixed amount every month into a mutual fund. Each instalment buys units at the current NAV, and returns compound month after month — meaning your gains also start earning returns. This is why SIP wealth grows slowly at first and much faster in later years (the "compounding curve").

Formula: Future Value = P × [((1+r)^n − 1) / r] × (1+r), where P = monthly SIP amount, r = expected monthly return, n = total months invested.

📢 Category-wise Long-term Return Expectations (Illustrative)

Fund Category	Typical Long-term CAGR Range
Large Cap Equity Funds	10% – 12%
Flexi / Multi Cap Funds	11% – 14%
Mid Cap Funds	12% – 16%
Small Cap Funds	13% – 18% (higher volatility)
Index Funds (Nifty 50/Sensex)	10% – 12%
Debt / Hybrid Funds	6% – 9%

These are broad historical ranges, not guarantees or predictions — actual returns vary by fund, market cycle, and time period. Higher-return categories also carry higher risk and volatility.

Worked Example: SIP vs Step-up SIP

A ₹10,000/month SIP at 12% expected annual return for 20 years grows to roughly ₹99.9 lakh from ₹24 lakh invested. The same SIP with a 10% annual step-up (increasing your instalment each year, matching typical salary growth) can grow to roughly ₹1.62 crore — nearly 60% more — from a higher total investment of about ₹68.7 lakh. Small annual increases compound into a much larger difference over long horizons.

SIP Tax Rules You Should Know

Equity funds: Long-Term Capital Gains (holding > 1 year) above ₹1.25 lakh in a financial year taxed at 12.5%. Short-Term Capital Gains (holding ≤ 1 year) taxed at 20%.
Debt funds: Gains taxed at your income slab rate, regardless of holding period, as per rules effective from April 2023 onward.
Each SIP instalment is treated as a separate investment for calculating holding period (FIFO basis) — the units bought first are considered sold first.
ELSS SIPs qualify for Section 80C deduction (Old Regime only) up to ₹1.5 lakh, with a 3-year lock-in per instalment.

Tax rules can change with each Union Budget — confirm current rates before making investment decisions.

Future value = P × [((1+r)^n − 1) / r] × (1+r), where P is your monthly investment, r is the expected monthly return rate, and n is the total number of months invested.

No — mutual fund SIP returns depend on market performance and are never guaranteed. This tool gives an illustrative estimate based on the return rate you enter.

A Step-up SIP automatically increases your monthly investment every year (e.g. matching a salary hike), which can significantly grow your final corpus compared to a flat SIP.

Many advisors suggest 10-12% for large-cap/index funds and 12-14% for diversified equity funds as a long-term planning assumption, while acknowledging any specific year can be well above or below this.

Generally no — SIPs work through "rupee cost averaging," buying more units when prices are low. Pausing during a fall often means missing the recovery phase, which historically has driven a large share of long-term SIP returns.

SIP spreads your investment across time, reducing the risk of investing everything at a market peak. Lumpsum investing puts the full amount in at once — it can outperform SIP in a rising market but carries more timing risk. Most first-time equity investors are advised to start with SIP.

Yes, open-ended mutual fund SIPs (except ELSS, which has a 3-year lock-in per instalment) can be stopped or redeemed anytime, subject to any exit load the fund charges for early redemption (typically within 1 year).

⚠️

Mutual fund investments are subject to market risk. This calculator provides an illustrative estimate only and is not investment advice. Tax rules mentioned are indicative as of 2026 and subject to change. Please consult a SEBI-registered investment advisor before investing.

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