How a SIP calculator works

A Systematic Investment Plan (SIP) is a way to invest a fixed amount in a mutual fund every month. Because each instalment earns returns and those returns earn further returns, your money grows by compounding. The calculator above estimates what your monthly SIP could grow to for an assumed annual return.

The formula

The return is an assumption, not a guarantee — equity mutual funds are market-linked. Many investors model 10–12% for long-term equity SIPs, but actual returns vary.

A worked example

Investing ₹10,000 per month for 15 years at an assumed 12%: total invested ₹18,00,000; estimated value about ₹50 lakh — the roughly ₹32 lakh gain is the power of compounding.

Why SIPs work

• Rupee-cost averaging: you buy more units when prices are low and fewer when high.
• Discipline: automatic monthly investing removes emotion and procrastination.
• Compounding: the longer you stay invested, the steeper the growth curve.

Why starting early beats investing more

Time matters more than amount because the final years of compounding do the heavy lifting. Investor A puts in ₹5,000 a month from age 25 to 35 (just 10 years, ₹6 lakh total) and then stops, leaving it invested. Investor B starts at 35 and invests ₹5,000 a month until 60 (25 years, ₹15 lakh total). At a 12% assumed return, Investor A often ends up with a larger corpus at 60 despite investing far less — simply because that early money compounded for 35 years. The lesson: begin now, even with a small amount, and increase it later.

Step-up SIP: a simple upgrade

A step-up (or top-up) SIP raises your monthly amount by a fixed percentage each year — say 10% — usually matched to your salary growth. A ₹10,000 SIP that steps up 10% a year for 15 years can finish with a noticeably larger corpus than a flat ₹10,000 SIP, because each raise feeds the compounding engine. Most fund platforms let you set this automatically.

SIP vs lump sum, and taxes

A SIP suits salaried investors with monthly surplus and smooths out market timing; a lump sum can do better in a clearly rising market but carries timing risk. For tax, equity mutual funds held over a year attract long-term capital gains tax on gains above the annual exempt limit, while units sold within a year are taxed as short-term gains. Debt funds are taxed differently. Always check the current capital-gains rules and the fund's exit load before redeeming, and remember the figure this tool shows is an estimate, not a promise.

Frequently asked questions

Source: standard future-value-of-annuity mathematics. Mutual fund returns are market-linked and not guaranteed. ComplyKraft is independent; this is not investment advice.