How are SIP returns calculated?
A Systematic Investment Plan (SIP) invests a fixed amount every month into a mutual fund. Each instalment buys units at that month’s price and then compounds for the rest of the tenure, so the money you invest early does the most work. Because each instalment grows for a different length of time, the maturity value is the sum of many small compounding streams.
This calculator uses the annuity-due method — it assumes each SIP is invested at the start of the month — which matches how most Indian fund platforms show projected returns.
SIP of ₹5,000, ₹10,000 and ₹25,000 a month
At an assumed 12% annual return over 10 years, the maturity value scales with the monthly amount. Notice how the gains component grows faster than the amount invested — over a long horizon, more than half the maturity value can come from returns rather than your own contributions.
| ₹5,000 / mo | ₹11.6 lakh |
| ₹10,000 / mo | ₹23.2 lakh |
| ₹25,000 / mo | ₹58.1 lakh |
SIP vs lumpsum — which grows more?
A lumpsum invests everything on day one, so at the same return it usually ends higher than a SIP of the same total, simply because the full amount compounds for longer. But most people don’t have a lumpsum to invest — and a SIP spreads your entry across market highs and lows (rupee-cost averaging), which lowers the risk of investing everything at a peak. The right choice depends on whether you have money to invest now or you earn it monthly.
What return should you assume?
Equity mutual funds in India have historically delivered roughly 10–13% a year over long periods, but past returns don’t guarantee future ones. For a realistic projection, use a conservative figure and treat anything above it as a bonus. Debt and hybrid funds return less. Whatever you pick, remember the projection is an estimate, not a promise.
The math is the easy part
Every number above assumes one thing the calculator cannot check: that you keep going. The projection’s biggest gains arrive in the final years, stacked on everything before them — stop in year six of fifteen and you don’t lose 40% of the outcome, you lose most of it. Yet stopping is exactly what markets tempt you to do, because somewhere in any 15-year stretch your portfolio will spend months looking worse than a fixed deposit.
This is why fund returns and investor returns are famously different numbers: the fund earned 13%, its median investor earned less, because they arrived after rallies and left during crashes. The SIP’s real advantage is not rupee-cost averaging — it is that automation removes your monthly opinion from the process. Treat the debit like rent, review once a year, and judge progress against your goal, not against last quarter.
One more honest adjustment: state the goal in future rupees, not today’s. A ₹1 crore corpus 15 years out buys about ₹42 lakh of today’s life at 6% inflation — the inflation calculator on this site converts any goal into the number you should actually be aiming at.