ReckonBoxHow the SIP calculator works
A SIP calculator is a tool that projects the future value of a fixed monthly mutual fund investment. You give it three things: the amount you invest each month, the return you expect a year, and how long you keep going. It returns the total value, how much of that is your own money, and how much is growth. A ₹5,000 monthly SIP at 12 percent for 10 years reaches about ₹11.62 lakh, of which ₹6 lakh is invested and ₹5.62 lakh is growth.
The engine here goes further than the usual three boxes. Switch on a yearly step-up, adjust for inflation to see the value in today money, add a starting lumpsum, and read the year-by-year table that most calculators hide.
The formula, in plain terms
A SIP grows by the future-value formula for a monthly annuity: FV = P x [((1 + i)^n - 1) / i] x (1 + i). P is the monthly amount, i is the monthly rate (your annual return divided by 12), and n is the number of months. Each instalment compounds for the months that remain after it, so the earliest rupees do the heaviest lifting. That is why a 20-year SIP runs closer to four times a 10-year one, well beyond double.
How much a monthly SIP grows
The table below runs the formula at 12 percent a year across common amounts and horizons, so you can read your rough number without typing.
| Monthly SIP | 5 years | 10 years | 15 years | 20 years |
|---|---|---|---|---|
| ₹1,000 | ₹0.82 lakh | ₹2.32 lakh | ₹5.05 lakh | ₹9.99 lakh |
| ₹5,000 | ₹4.12 lakh | ₹11.62 lakh | ₹25.23 lakh | ₹49.96 lakh |
| ₹10,000 | ₹8.25 lakh | ₹23.23 lakh | ₹50.46 lakh | ₹99.92 lakh |
| ₹25,000 | ₹20.62 lakh | ₹58.08 lakh | ₹1.26 crore | ₹2.50 crore |
A ₹10,000 SIP crossing ₹1 crore in 20 years is the headline most people are chasing, and the table shows the two levers that get there: a bigger amount, or more time.
Step up as your income grows
A step-up SIP raises the monthly amount by a fixed percentage every year. The idea tracks a rising salary, so the investment climbs each year from the modest level you could afford on day one. The effect compounds hard. Add a 10 percent annual step-up to that ₹5,000 SIP at 12 percent for 10 years and the corpus climbs from about ₹11.62 lakh to roughly ₹16.9 lakh, a gain of more than ₹5 lakh for money you would likely have earned anyway. For the full picture, with your corpus set beside a flat SIP and the final-year instalment spelled out, the step-up SIP calculator is the dedicated tool.
What inflation does to the number
Inflation-adjusted value is your corpus divided by (1 + inflation) raised to the number of years. A future ₹11.62 lakh sounds like a lot, and it buys less than it seems. At 6 percent inflation, that 10-year corpus is worth about ₹6.5 lakh in today spending power. Turn the inflation switch on and the calculator shows this real value beside the nominal one, so your goal is set in money you actually recognise. Most SIP calculators skip this step, which quietly overstates how far the number will stretch.
The cost of starting late
The cost of waiting is the corpus you give up by starting a SIP later. Compounding pays for time more than for size, so a delay is expensive in a way that is easy to underrate. On a ₹5,000 SIP at 12 percent aimed at a 20-year horizon, starting five years later, and so investing for 15 years, leaves you with about ₹25.23 lakh against ₹49.96 lakh. Five years of waiting costs nearly ₹25 lakh, almost half the outcome. The calculator surfaces this gap for your own inputs.
Where the estimate can mislead
A SIP calculator assumes a single, steady return, and real markets do not deliver one. Returns arrive in a lumpy order, and a bad stretch near the end hurts more than the same stretch early on, something a flat rate cannot show. The 12 percent default is a long-run equity average that no single year is obliged to hit, so it is worth rerunning at 10 percent to see the softer case. Gains are also taxed as capital gains when you redeem, which the pre-tax figure here leaves out. Treat the output as a planning estimate. Mutual fund returns are market-linked, so for money decisions talk to a SEBI-registered adviser. To see how a one-time investment compares, the India finance tools cover lumpsum and more.
Frequently asked questions
What is a SIP calculator? A SIP calculator estimates the future value of a systematic investment plan from three inputs: the monthly amount, the expected annual return, and the number of years. It uses the future-value formula for a monthly annuity, so it shows what steady investing plus compounding could grow to.
How is SIP return calculated? The formula is FV = P x [((1 + i)^n - 1) / i] x (1 + i), where P is the monthly amount, i is the monthly rate (annual return divided by 12), and n is the number of months. A ₹5,000 monthly SIP at 12 percent for 10 years reaches about ₹11.62 lakh on ₹6 lakh invested.
What return rate should I assume? Most calculators default to 12 percent, a long-run average often quoted for equity mutual funds in India. Actual returns are not fixed and vary year to year, so it helps to also check the result at a lower rate like 10 percent.
What is a step-up SIP? A step-up SIP raises the monthly amount by a set percentage every year, usually to track a rising salary. Turning on a 10 percent step-up on a ₹5,000 SIP at 12 percent for 10 years lifts the corpus from about ₹11.6 lakh to roughly ₹16.9 lakh.
Does this show inflation-adjusted returns? Yes. Switch inflation on and the calculator also shows the value in today money, found by dividing the future value by (1 + inflation) raised to the number of years. At 6 percent inflation, a ₹11.62 lakh corpus in 10 years is worth about ₹6.5 lakh in today spending power.
Can I add a one-time lumpsum with the SIP? Yes. Enter an initial lumpsum and it grows at the same expected return alongside the monthly SIP. A ₹1 lakh lumpsum at 12 percent for 10 years adds a little over ₹3 lakh to the total.
What is the cost of starting later? Because compounding rewards time, delaying a SIP is expensive. The calculator shows the gap between starting now and starting five years later on the same plan, which is often several lakh on a long horizon.
Are SIP returns taxed? Gains on equity mutual funds are taxed as capital gains when you redeem, with the rate depending on the holding period, and the tax is not deducted inside the calculator. The figures here are pre-tax estimates.
Is the projected amount guaranteed? No. Mutual fund returns are market-linked and change with the market, so the calculator gives an estimate based on the rate you assume, not a promise. It is a planning tool, not investment advice.
How often should I review my SIP? A yearly check is common, to see whether the projected corpus still matches your goal and whether a step-up would close a gap. The year-by-year table here shows how far along the plan you are at each point.