Add an annual step-up to see the effect of raising your SIP as your income grows, and set your expected inflation to see what the final corpus is really worth in today's money. Plan for up to 60 years, so you can model a SIP started in your early twenties all the way to retirement.
How SIP returns are calculated
FV = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i)
- FV
- Future value (maturity amount)
- P
- Monthly SIP amount
- i
- Monthly rate of return, i.e. annual rate ÷ 12 ÷ 100
- n
- Number of monthly instalments
- Real value
- FV ÷ (1 + inflation)^years, the corpus in today's money
Each instalment is assumed to be invested at the start of the month and compounds monthly until the end of the period. This is the convention used by most Indian fund houses.
With a step-up, the monthly amount rises by your chosen percentage after every 12 instalments, and the calculator simulates each month individually.
Mutual fund returns are market-linked and not guaranteed. Use a conservative rate (for example 10 to 12% for diversified equity over the long term) for planning.
Tips to get more from your SIP
Small changes in behaviour have a bigger impact than chasing the highest returning fund.
- Start early. Ten extra years of compounding can matter more than a higher monthly amount.
- Step up your SIP every year in line with salary hikes.
- Stay invested through market falls; SIPs buy more units when prices are low.
- Equity fund gains above ₹1.25 lakh a year are taxed at 12.5% as long-term capital gains when held over a year.