Work out what a monthly SIP (systematic investment plan) in a mutual fund could grow to. Add a yearly step-up to see how raising your SIP with your salary changes the result.
| Year | Monthly SIP | Invested | Value |
|---|
A SIP invests a fixed amount every month, and each instalment grows for the months that remain. The calculator uses the standard formula that mutual fund houses use, with monthly compounding and each instalment invested at the start of the month:
FV = P × [(1 + i)n − 1] ÷ i × (1 + i), where P is the monthly SIP, i is the yearly return ÷ 12 ÷ 100 and n is the number of months.
With a step-up, the monthly amount rises by the chosen percentage every 12 months, so the calculator adds up each month separately.
At an assumed 12% a year:
| Period | Invested | Returns | Value |
|---|---|---|---|
| 5 years | ₹3,00,000 | ₹1,12,432 | ₹4.12 lakh |
| 10 years | ₹6,00,000 | ₹5,61,695 | ₹11.62 lakh |
| 15 years | ₹9,00,000 | ₹16,22,880 | ₹25.23 lakh |
| 20 years | ₹12,00,000 | ₹37,95,740 | ₹49.96 lakh |
| 25 years | ₹15,00,000 | ₹79,88,175 | ₹94.88 lakh |
Time does most of the work: in the 25-year row, returns are several times the money put in. Raising the SIP by 10% each year makes a big difference too. ₹5,000 a month with a 10% yearly step-up for 20 years means investing ₹34.36 lakh and ending with about ₹99.44 lakh.
Mutual fund returns are not fixed. Equity funds have delivered roughly 10% to 13% a year over long periods in India, but with big swings in between, and some years are negative. Debt funds usually return less, closer to fixed deposit rates. Try a lower figure, such as 8% to 10%, to see a cautious case.
Each SIP instalment counts as a separate purchase. Under current rules, gains on equity funds held for more than 12 months are long-term and taxed at 12.5% above ₹1.25 lakh of such gains a year; gains on units held for 12 months or less are taxed at 20%. Debt fund gains are added to your income and taxed at your slab rate. Our income tax calculator shows your slab.
Some people run a SIP in crypto as well. That works very differently: crypto gains are taxed at a flat 30% and prices swing far more. See our crypto investment calculator and crypto SIP apps in India.
About ₹23.23 lakh at an assumed 12% a year, from ₹12 lakh invested. At 10% it would be about ₹20.66 lakh. Actual returns depend on the fund and the market.
A step-up (or top-up) SIP raises your monthly amount by a fixed percentage every year, for example 10%, usually in line with salary increases. Most fund houses let you set this up when you start the SIP.
No. A SIP is only a way of investing regularly. The return depends on how the fund performs. Equity funds can fall in value, especially over short periods.
Many funds accept SIPs from ₹500 a month, and some from ₹100. Check the scheme information document of the fund you choose.
A lump sum invested at a good time can earn more, but nobody can reliably pick that time. A SIP spreads purchases over many months, so you buy more units when prices are low. For most salaried investors, a SIP is simpler and easier to stick with.
