Mutual Funds
SIP Calculator
Calculate the maturity value of your SIP (Systematic Investment Plan) and see how compounding multiplies your wealth over time. A ₹5,000/month SIP at 12% annual return for 20 years grows to over ₹49 lakh — from just ₹12 lakh invested, a 311% wealth gain.
India's monthly SIP inflows crossed ₹23,000 crore in FY 2024-25. Use this calculator to set realistic goals for retirement, your child's education, or a home purchase — and see exactly how much you need to invest each month to get there.
Advertisement
What is SIP and How Does it Work?
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund at regular intervals — monthly, weekly, or quarterly. Your money buys more units when prices are low and fewer when high, averaging out the cost over time (rupee cost averaging).
The key growth driver is compounding: returns earned in earlier periods themselves earn returns in later periods. A ₹5,000/month SIP at 12% p.a. for 20 years turns ₹12L invested into over ₹49L — a wealth gain of 311%.
SIP Formula
The maturity value (FV) of a SIP is calculated using the compound interest formula for recurring payments:
Where P = monthly investment, r = monthly rate (annual rate ÷ 12 ÷ 100), n = total months.
SIP vs Lump Sum
Lump sum investing works better in rising markets; SIP works better in volatile or falling markets due to cost averaging. For most retail investors without the ability to time the market, SIP is the recommended approach — it enforces financial discipline and removes emotional decision-making.
Frequently Asked Questions
What is a good SIP return rate to expect in India?▼
Equity mutual funds in India have historically delivered 10–14% annual returns over 10+ year periods. Large-cap funds average 10–12%, mid-cap funds 12–15%, and small-cap funds 13–18% (with higher volatility). A conservative planning rate of 10–12% p.a. is commonly used.
What is the minimum SIP amount?▼
Most mutual funds in India allow SIPs starting at ₹100–₹500 per month. Several AMCs have removed minimum investment limits for specific schemes. You can start SIPs on platforms like Groww, Zerodha Coin, or directly through the AMC website.
Can I stop or pause a SIP?▼
Yes, you can pause a SIP for 1–3 months or stop it entirely online through your fund platform. There is no penalty for stopping a SIP, though some ELSS (tax-saving) SIPs have a 3-year lock-in per instalment.
Is SIP return guaranteed?▼
No. SIP returns depend on the market performance of the underlying mutual fund. Equity SIPs carry market risk. However, historically, equity SIPs held for 7+ years have rarely generated negative returns in India.
Does SIP qualify for tax deduction?▼
SIPs in ELSS (Equity Linked Savings Scheme) qualify for deduction up to ₹1.5L per year under Section 80C. Regular equity or debt mutual fund SIPs do not give upfront tax deductions, but LTCG up to ₹1.25L per year is tax-free (from FY 2024-25).
What happens to SIP if the market crashes?▼
If the market falls, your SIP buys more units at lower prices — this is rupee cost averaging working in your favour. Historically, investors who continued SIPs through crashes (2008, 2020) saw the best long-term results by capturing the recovery at low prices.
How SIP Compounding Works
A Systematic Investment Plan (SIP) invests a fixed amount in a mutual fund at regular intervals — typically monthly. The power of a SIP comes from two forces working together: rupee cost averaging (your fixed amount buys more units when markets fall, fewer when they rise, lowering your average cost over time) and compounding (returns on earlier investments generate their own returns).
The SIP maturity formula is: FV = P × [(1+r)ⁿ − 1] / r × (1+r), where P = monthly amount, r = monthly rate (annual ÷ 12), n = months. What this produces in practice:
| Monthly SIP | 10 years | 20 years | 30 years |
|---|---|---|---|
| ₹3,000 | ₹6.97L | ₹29.7L | ₹1.06 Cr |
| ₹5,000 | ₹11.6L | ₹49.5L | ₹1.77 Cr |
| ₹10,000 | ₹23.2L | ₹99.0L | ₹3.53 Cr |
| ₹20,000 | ₹46.4L | ₹1.98 Cr | ₹7.07 Cr |
Returns calculated at 12% p.a. (approximate long-term average for diversified equity funds in India). Actual returns vary. Past performance is not indicative of future results.
Which Mutual Fund Category Should You Choose?
India's SEBI-regulated mutual fund universe has several categories. For a long-term SIP (7+ year horizon), equity funds are generally recommended. For shorter goals (3–5 years), hybrid or debt funds reduce volatility.
| Category | Risk | Expected return (10Y) | Suitable for |
|---|---|---|---|
| Large-cap / Index | Moderate | 10–12% | Conservative, 7+ years |
| Flexi-cap | Moderate-high | 11–14% | Balanced, 7+ years |
| Mid-cap | High | 13–16% | Growth-focused, 10+ years |
| Small-cap | Very high | 14–18% | Aggressive, 10+ years |
| Hybrid / Balanced | Low-moderate | 9–11% | First-time investors, 5+ years |
| Debt | Low | 6–8% | Short goals, 3–5 years |
For most salaried Indians starting their first SIP, a large-cap index fund (tracking Nifty 50 or Sensex) or a flexi-cap fund provides broad exposure with lower expense ratios than actively managed funds. SEBI mandates expense ratios below 1.05% for direct plans of equity funds.
New to SIPs? Read our complete beginner's guide.
Covers fund selection, how to set up a SIP in 10 minutes, KYC, and tax treatment.
Source: AMFI India industry data. Monthly SIP inflows in India crossed ₹23,000 crore in 2024. Last reviewed: October 2025.