Worked example
Example with the default numbers — change them above.
Monthly SIP amount: ₹10,000 · Assumed return (a year): 12% · Investment period: 10 yrs
Your ₹10,000 monthly SIP becomes ₹22.4 L in 10 years at 12% a year, of which ₹10.4 L is returns.
| Value at the assumed return | ₹22.4 L · after 10 years |
|---|---|
| Amount invested | ₹12 L · ₹10,000 × 120 months |
| Estimated returns | ₹10.4 L · 46% of the final value |
| Worth in today's money | ₹12.51 L · after 6% yearly inflation |
How the SIP Calculator works
- Enter the amount you will invest each month, the yearly return you assume and the number of years.
- The yearly return is converted to a monthly rate so that twelve months compound to exactly your yearly figure.
- Each month the calculator adds your SIP at the start of the month, then applies one month of growth to the whole balance.
- After the last month it reports the final value, the total you invested and the difference, which is the returns.
- It then divides the final value by the inflation you choose, to show what the money would be worth in today's rupees.
SIP future value (SIP paid at the start of each month)
FV = P × [((1 + i) ^ n − 1) ÷ i] × (1 + i)
FV = value at the end
P = monthly SIP amount
i = monthly rate = (1 + yearly return) ^ (1 ÷ 12) − 1
n = number of monthsAssumptions and limits
- The yearly return is converted to a monthly rate so that twelve months compound to exactly your yearly figure (12% a year is about 0.949% a month). Calculators that simply divide the yearly rate by 12 (1% a month) show higher numbers for the same inputs: about 4% more after 10 years, 15% more after 30 years and over 20% more after 40 years.
- Each SIP instalment is invested at the start of the month, the return is the same steady rate every month, and the value is read at the end of the last month. Investing at month-end instead would give about 1% less.
- Market returns are not fixed or guaranteed. Real investments rise and fall, so treat the result as an illustration at one steady rate, not a forecast.
- Enter returns after fund charges: a fund's published returns already have its expense ratio taken out. Exit loads and taxes on gains are not deducted, and they lower what you actually take home.
- Inflation is a steady figure you choose; the today's-money value divides the final amount by (1 + inflation) for each year.
Frequently asked questions
How does a SIP calculator work?
It adds your monthly amount at the start of each month and grows the whole balance by one month's return, repeating for every month of the period. The result is the expected value, the total invested and the returns. For example, ₹10,000 a month for 10 years at 12% a year grows to about ₹22.4 lakh, of which ₹12 lakh is your money.
Why does this SIP calculator show a different number from another one?
Calculators convert the yearly return to a monthly rate in different ways. This one makes twelve months compound to exactly your yearly return, so 12% a year is about 0.949% a month. Tools that use 1% a month show a higher result: ₹10,000 a month for 10 years gives about ₹23.2 lakh instead of ₹22.4 lakh, and the gap widens to over 20% at 40 years. Neither is wrong; they assume different things.
What return should I assume for a SIP?
Nobody can know future market returns, and no return is guaranteed. A sensible approach is to try several rates, such as 8%, 10% and 12%, and plan on the lower ones. Past returns of a fund do not guarantee the future. Use a rate you would still be comfortable with if markets disappoint.
Are SIP returns fixed or certain?
No. A SIP is a way of investing a fixed amount regularly, usually in mutual funds. The value of the units moves with the market, so your result can be higher or lower than shown here, and in some periods you can lose money. The calculator illustrates one steady rate; real returns are uneven.
Is a SIP better than a lump sum?
They solve different problems. A SIP suits regular savers because it spreads purchases over time, which reduces the risk of investing everything at a high point. A lump sum may do better if markets rise soon after you invest, and worse if they fall. Compare both with the lumpsum calculator using the same return and period.
How much will a ₹5,000 SIP become in 20 years?
At an assumed 12% a year, a ₹5,000 monthly SIP for 20 years becomes about ₹46 lakh, of which ₹12 lakh is your own money. At 8% a year the same SIP becomes about ₹28.6 lakh. These are illustrations, not forecasts. Enter your own numbers above to see yours.
Sources
Logic and rates last verified on .
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Guides that go deeper
See worked examples
The monthly SIP needed for goals from ₹10 lakh to ₹5 crore over 3 to 30 years.
- How much SIP is needed to reach ₹10 lakh in 3 years? — SIP ₹23,213 a month
- How much SIP is needed to reach ₹10 lakh in 5 years? — SIP ₹12,330 a month
- How much SIP is needed to reach ₹10 lakh in 7 years? — SIP ₹7,764 a month