SIP Calculator

What is a SIP?

A Systematic Investment Plan (SIP) is a way of investing a fixed amount in a mutual fund at regular intervals — usually every month. Instead of timing the market, you invest steadily, buying more units when prices are low and fewer when prices are high (rupee-cost averaging). Over long periods, compounding can turn modest monthly amounts into a significant corpus.

How this SIP calculator works

Enter your monthly investment, an expected annual rate of return, and the number of years you plan to invest. The calculator projects the maturity value assuming returns compound monthly and each instalment is invested at the start of the month. It splits the result into how much you invested versus the estimated returns.

The power of rupee-cost averaging

When you invest a fixed amount every month, you automatically buy more units when the market falls and fewer when it rises. This is called rupee-cost averaging, and it removes the pressure of trying to "time" the market. Over a full market cycle your average purchase price tends to smooth out, which is why a disciplined SIP often beats sporadic lump-sum investing for ordinary investors. The longer you stay invested, the more powerful compounding becomes — the returns on your early instalments themselves start earning returns.

Start early: why time matters more than amount

Because of compounding, the number of years you stay invested usually matters more than the size of each instalment. An investor who puts in ₹5,000 a month for 25 years typically ends up with a far larger corpus than one who invests ₹10,000 a month for only 12 years, even though the second person contributes more in total. Starting even a small SIP in your twenties, and stepping it up as your income grows (a "step-up SIP"), is one of the simplest ways to build long-term wealth.

How mutual fund gains are taxed

SIP returns are taxed only when you redeem, and each instalment is treated as a separate investment for holding-period purposes:

• Equity funds: gains on units held over 12 months are long-term and taxed at 12.5% above a ₹1.25 lakh annual exemption (Section 112A). Units held 12 months or less are short-term and taxed at 20% (Section 111A).
• Debt funds bought after 1 April 2023: always taxed at your slab rate, regardless of holding period.
• ELSS funds qualify for a Section 80C deduction (old regime) but have a 3-year lock-in.

See the capital gains guide for the full picture, and estimate your overall liability with the ITR calculator.

Tips for a successful SIP

• Match the fund to the goal: use equity funds for goals 7+ years away, and hybrid or debt funds for nearer goals.
• Don't stop in a downturn: falling markets are exactly when your SIP buys cheap units.
• Use realistic returns: assume a conservative rate in the calculator and treat any extra as a bonus.
• Review annually, not daily — frequent switching usually hurts long-term returns.