What is a SIP Calculator?
A SIP invests a fixed amount monthly; returns compound on every instalment. The magic is time: the same monthly amount over 20 years can end up mostly gains rather than mostly contributions.
This calculator uses the standard annuity-due formula with monthly compounding, and labels the output as a projection, because markets do not deliver a constant 12%.
The order of contributions barely matters; the years do. At 12%, Rs 10,000 monthly becomes about Rs 50L in 15 years but Rs 1 crore in 20: the last five years contribute as much as the first fifteen, because compounding is back-loaded. Starting a smaller SIP today beats starting a bigger one after the next bonus.
Frequently asked questions
Should I stop my SIP when markets fall?
Falling markets are when a SIP buys the most units: stopping converts temporary declines into permanent damage. The mechanism only works if contributions continue through downturns.
What is a step-up SIP?
Increasing the monthly amount yearly (say 10%) alongside salary growth. It roughly doubles the final corpus over 20 years versus a flat SIP at the same starting amount.
What return should I assume?
Long-run Indian equity index returns have historically averaged 11-13% before tax. Assuming more than 12% for planning is optimistic.
Is the projection guaranteed?
No: it assumes a constant return that no market delivers. Real outcomes vary around it, especially over short periods.
What is rupee-cost averaging?
Fixed monthly buying automatically purchases more units when prices are low and fewer when high: smoothing your entry price.
Does this include expense ratios and tax?
No: fund expenses reduce returns before you see them, and LTCG tax applies on withdrawal.