A systematic investment plan (SIP) invests a fixed amount in a mutual fund every month. Because you keep buying through market ups and downs, you buy more units when prices are low and fewer when they are high. Over long periods, compounding does most of the heavy lifting.
How to use the calculator
Enter your monthly investment, the return you expect each year and how long you plan to invest. Add an annual step-up if you plan to raise your SIP as your income grows. The result shows what you put in, the estimated gain and the total value, along with a year-by-year table.
Example: ₹10,000 a month
- At an assumed 12% a year for 10 years, you invest ₹12 lakh and the estimated value is about ₹23.23 lakh.
- Keep going for 20 years and you invest ₹24 lakh, but the estimated value is about ₹99.9 lakh. The second decade adds far more than the first. That is compounding at work.
- Raise the SIP by 10% every year for 10 years and you invest about ₹19.12 lakh for an estimated ₹33.74 lakh.
Choosing a sensible return assumption
Returns are not guaranteed and change every year. Equity funds can fall sharply in a bad year. It is safer to test a few rates, for example 8%, 10% and 12%, and plan around the lower figure. Debt funds usually return less than equity funds but swing less.
