SIP Calculator
📜 SIP methodology & regulator note
Projections use the standard SIP future-value formula with monthly compounding. Mutual fund returns are market-linked and not guaranteed — read scheme documents; SIPs in India are regulated by SEBI, and AMFI publishes historical category returns. Last verified: June 2026.
📊 Methodology: This calculator uses standard financial formulas. Results are estimates for planning purposes only. Consult a qualified financial advisor before making financial decisions.
What is a SIP and how does it work?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly (typically monthly) into a mutual fund scheme. Rather than investing a lump sum, SIP allows you to invest small, regular amounts that accumulate into a large corpus over time through the power of compounding and rupee cost averaging. Related: use the Investment Calculator to go further, or the ROI Calculator for a different angle.
SIP Returns Formula: FV = P × {[(1 + r)^n − 1] / r} × (1 + r)
- FV = Future Value (estimated corpus)
- P = Monthly SIP amount
- r = Monthly rate of return (Annual return ÷ 12 ÷ 100)
- n = Total number of months (Years × 12)
Example: ₹10,000/month SIP for 20 years at 12% annual return: FV = 10,000 × {[(1.01)^240 − 1] / 0.01} × 1.01 = ₹98.9 lakh. Total invested: ₹24 lakh. Gains: ₹74.9 lakh (76% of corpus).
Rupee Cost Averaging — SIP's built-in advantage
When you invest a fixed amount monthly, you automatically buy more mutual fund units when prices are low and fewer when prices are high. This averages out your purchase cost over time, making you less vulnerable to market timing errors. This is called rupee cost averaging and is one of the most powerful risk-reduction mechanisms available to retail investors.
SIP return benchmarks (equity mutual funds, India)
| Fund Category | 10-Year SIP XIRR (Average) | 15-Year SIP XIRR (Average) |
|---|---|---|
| Large Cap Funds | 12–14% | 13–15% |
| Flexi Cap Funds | 13–16% | 14–17% |
| Small Cap Funds | 18–24% | 17–22% |
| Index Funds (Nifty 50) | 11–13% | 12–14% |
Past returns do not guarantee future performance. Use 10–12% as a conservative estimate for long-term equity fund SIP projections.
Step-Up SIP — increase contributions annually
A Step-Up SIP (also called Top-Up SIP) automatically increases your monthly investment by a fixed percentage each year. Increasing your SIP by 10% annually significantly boosts the final corpus. Example: ₹10,000/month SIP for 20 years at 12% = ₹98.9 lakh. The same SIP with 10% annual step-up grows to approximately ₹1.87 crore — nearly double.
Disclaimer: This calculator provides estimates for educational purposes only and does not constitute financial advice. Results may vary based on actual rates, fees, and conditions. Always consult a qualified financial advisor or official government resources before making financial decisions. View our calculation methodology.
Frequently asked questions about SIP
Is SIP safe? SIPs invested in equity mutual funds are subject to market risk. The NAV of the fund fluctuates with market conditions. Over long periods (10+ years), equity mutual funds in India have historically delivered inflation-beating returns, but no returns are guaranteed.
What is the minimum SIP amount? Most mutual funds allow SIPs starting from ₹500/month. Many large fund houses allow ₹100/month minimum via their apps. There is no maximum limit.
Can I stop a SIP anytime? Yes. SIPs can be paused or stopped without penalty at any time. The units already purchased remain invested in the fund until you choose to redeem them.
Is SIP better than lump sum investment? For most retail investors without expertise in market timing, SIP is preferable because it removes the risk of investing everything at a market peak. For large amounts during proven market corrections, lump sum can generate higher returns. Most financial advisors recommend SIP for regular monthly savings.
Sources & References
- Securities and Exchange Board of India (SEBI) — Mutual Fund Regulations
- Reserve Bank of India (RBI) — Lending Rate Guidelines
When should you choose SIP vs lump sum investing?
Both SIP and lump sum are valid ways to invest in mutual funds — the better choice depends on your situation, cash flow, and market conditions.
| Factor | SIP (Systematic Investment Plan) | Lump Sum |
|---|---|---|
| Best for | Salaried investors with monthly surplus | Investors with a large one-time corpus |
| Market timing risk | Low — rupee cost averaging smooths entry price | High — entire corpus enters at one price |
| Returns in rising market | Slightly lower (later instalments buy fewer units) | Higher (full capital earns from Day 1) |
| Returns in falling market | Higher (later instalments buy more units cheaply) | Lower (full capital exposed to decline) |
| Discipline required | Low — auto-debit handles it | High — must resist urge to time the market |
| Minimum amount | ₹500/month | ₹1,000 (most funds) |
| Historical winner (10-yr periods) | Wins in volatile/down markets (~40% of periods) | Wins in trending up markets (~60% of periods) |
Verdict: For most salaried investors in India, SIP is the default choice — it automates discipline and reduces timing risk. Use lump sum for windfalls (bonus, inheritance, maturity proceeds) after a significant market correction.
How does a step-up SIP grow with your salary?
A step-up SIP (also called top-up SIP) automatically increases your monthly investment amount by a fixed percentage or fixed amount each year. This mirrors salary increments and dramatically accelerates wealth creation without requiring any extra effort.
| Strategy | Monthly SIP | Annual Step-Up | Corpus at 20 Years (12% return) | Total Invested |
|---|---|---|---|---|
| Flat SIP | ₹5,000 | 0% | ₹49.9 lakh | ₹12.0 lakh |
| 10% annual step-up | ₹5,000 (Year 1) | 10%/year | ₹1.06 crore | ₹34.4 lakh |
| 15% annual step-up | ₹5,000 (Year 1) | 15%/year | ₹1.64 crore | ₹54.2 lakh |
A 10% annual step-up more than doubles the corpus compared to a flat SIP, while keeping the initial monthly commitment the same. Most mutual fund platforms (Zerodha Coin, Groww, Kuvera) support automatic step-up SIPs.
Mutual fund categories and expected SIP returns
Not all mutual funds are equal. The category determines both the expected return and the risk level. Use the SIP Calculator above with these historical return benchmarks:
| Fund Category | Risk Level | Historical Annual Return (10-yr avg.) | Suitable For |
|---|---|---|---|
| Large-cap equity | Moderate | 11–13% | Core portfolio; 5+ year horizon |
| Flexi-cap / Multi-cap | Moderate-High | 12–15% | Diversified growth; 7+ years |
| Mid-cap equity | High | 14–18% | Aggressive growth; 8+ years |
| Small-cap equity | Very High | 15–20% | Maximum growth; 10+ years, high volatility |
| ELSS (tax-saving) | Moderate-High | 12–15% | Section 80C deduction + wealth creation; 3yr lock-in |
| Hybrid / Balanced | Moderate | 9–12% | Conservative equity investors; 5+ years |
| Debt funds | Low | 6–8% | Capital preservation; 1–3 year horizon |
| Liquid funds | Very Low | 5–7% | Emergency fund parking; any tenure |
Sources: AMFI India historical NAV data; SEBI mutual fund categories. Past returns are not a guarantee of future performance.