SIP Calculator
Simulate how regular monthly investments accumulate into substantial wealth through compounding, rupee cost averaging, and annual step-ups.
Result Analysis & Financial Guidance
Customized insights based on your ₹10,000 /month plan over 10 years.
Step-Up SIP Accelerator
If you increase your monthly investment by just 10% every year (matching your annual salary increments), your projected wealth will reach:
Step-up SIPs significantly outpace inflation without straining your current monthly budget.
The Power of Staying 5 More Years
Because compounding is exponential, the final years generate the highest monetary returns. If you continue for 15 years:
Staying invested transforms modest monthly savings into generational wealth.
Recommended Fund Allocation
For your 10-year time frame, financial advisors suggest:
Tax Rules & Volatility Strategy
- 1. Capital Gains Tax:Equity LTCG is tax-free up to ₹1.25 Lakh/year; gains beyond that are taxed at 12.5% (Budget 2024).
- 2. Market Dips:Never stop your SIP during market corrections. Lower NAVs buy more units, accelerating returns when markets recover.
4 Golden Rules for Successful SIP Investing
Important Note on Projections (AMFI / SEBI Guidelines)
This calculator is for illustration purposes only and does not represent actual returns. Mutual fund investments are subject to market risks, and the stock market does not offer fixed returns. In accordance with AMFI guidelines, the expected rate of return in this calculator is capped at 13% p.a. based on historical rolling returns, and it should not be construed as a promise, guarantee, or forecast of future returns.
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is a disciplined method of investing a fixed sum of money into mutual funds at predetermined intervals (usually monthly). Instead of timing the stock market or risking a large lump sum at market peaks, SIP automates wealth accumulation by purchasing fund units regularly.
When market prices fall, your fixed monthly amount buys more units; when prices rise, it buys fewer units. Over several years, this averages down your total acquisition cost—a mathematical advantage known as Rupee Cost Averaging.
The SIP Compounding Formula
The future value (FV) of an annuity due with monthly compounding is calculated as:
- FV: Future Value / Corpus
- P: Monthly Investment
- r: Monthly Rate (Annual / 12 / 100)
- n: Number of Months (Years × 12)
SIP vs. Lump Sum: Which is Right For You?
| Feature | Monthly SIP | Lump Sum Investment |
|---|---|---|
| Market Timing Risk | None (Rupee Cost Averaging mitigates volatility) | High (Entering at a market peak can hurt near-term returns) |
| Capital Requirement | Starts as low as ₹500/month | Requires a large upfront capital pool (₹50,000+) |
| Discipline & Habit | Automated monthly auto-debit builds wealth on autopilot | Subject to investor hesitation and market psychology |
| Best Suited For | Salaried professionals and regular monthly income earners | Bonuses, business profits, inheritance, or property sale proceeds |
Frequently Asked Questions (SIP FAQ)
Can I pause or stop my SIP at any time?
Yes. Unlike fixed deposits or recurring deposits with rigid lock-ins, non-ELSS mutual fund SIPs are completely flexible. You can pause or cancel your SIP without any penalty fees or interest reductions.
What happens if my bank balance is insufficient for a SIP?
The mutual fund house will simply skip that month’s investment without cancelling your ongoing SIP. However, your bank may charge a mandate bounce fee (NACH bounce charge), so it is best to set your SIP date right after salary day.
How are mutual fund SIP returns taxed in India?
As per Budget 2024, for Equity Mutual Funds held over 12 months, Long Term Capital Gains (LTCG) are tax-exempt up to ₹1.25 Lakh per financial year, and taxed at 12.5%on gains above that limit. Short-term gains (held < 12 months) are taxed at 20%.
What is the ideal number of mutual funds to hold?
Financial advisors generally recommend holding between 2 to 4 well-chosen funds across distinct categories (e.g., 1 Flexi Cap/Large Cap, 1 Mid Cap, 1 Small Cap or Hybrid fund). Holding 10+ funds causes unnecessary portfolio overlap.