SIP (Systematic Investment Plan) Calculator
Calculate potential wealth accumulation from monthly mutual fund SIPs with compound returns across 1 to 30 years.
Total Invested: ₹9,00,000 • Wealth Gained: ₹16,22,880
How to Use the SIP Calculator
Enter Monthly Investment
Specify how much money you want to invest each month (e.g., ₹5,000).
Set Expected Return & Tenure
Input expected annual return (e.g., 12%) and time horizon in years (e.g., 15 years).
Inspect Wealth Gain
View your total invested amount versus cumulative wealth gained.
A Systematic Investment Plan (SIP) compounds monthly contributions over time using rupee cost averaging. The mathematical formula calculates total maturity value by compounding each monthly installment from its deposit date until the end of the tenure.
Power of Compounding: How Monthly Mutual Fund SIPs Build Wealth in India
A Systematic Investment Plan (SIP) is one of the most effective tools for retail wealth creation. Instead of attempting to time volatile market tops and bottoms, an investor commits a fixed sum (e.g., ₹5,000 or ₹10,000) every month on a set date into an equity mutual fund or index fund.
SIP investing exploits two massive financial principles: Rupee Cost Averaging and Compound Interest. When markets decline, your fixed monthly allocation buys more mutual fund units; when markets rally, those accumulated units appreciate in value. Over decades, compounding transforms modest monthly savings into substantial wealth.
For example, investing ₹10,000 per month at a historical long-term equity return of 12% per annum results in an invested capital of ₹24 Lakhs over 20 years. However, your total portfolio value grows to approximately ₹99.9 Lakhs—meaning more than ₹75 Lakhs of your corpus represents pure compound growth!
Historical Asset Class Returns & Long-Term SIP Benchmarks in India
| Parameter / Concept | Formula or Rule | Practical Example |
|---|---|---|
| Nifty 50 / Sensex Index Funds | Historical 12.0% – 14.0% CAGR (15+ yrs) | Low expense ratio, core wealth builder |
| Flexi Cap / Large & Mid Cap | Historical 13.0% – 15.0% CAGR | Balanced exposure across market capitalizations |
| Small Cap Mutual Funds | Historical 15.0% – 18.0% CAGR (High Volatility) | Recommended for 10+ year time horizons |
| Debt / Hybrid Funds | Historical 7.0% – 9.0% CAGR | Lower risk, capital preservation focus |
| Equity Long-Term Capital Gains (LTCG) | 12.5% tax on gains exceeding ₹1.25 Lakh/yr | As per Budget 2024 revised tax rates |
Practical Tips & Common Traps to Avoid
Increasing your monthly SIP by just 10% each year as your salary rises can double your ultimate 20-year corpus.
Bear markets are when you accumulate units at discounted NAVs. Pausing during downturns destroys long-term compounding.
Equities carry short-term volatility. Over 10+ years, the probability of negative returns in diversified index funds historically approaches zero.
Frequently Asked Questions
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