Contents
SIP Calculator — Monthly SIP Returns & Maturity Value
Calculate how much your monthly SIP will grow to at any return rate and investment period.
Visual Breakdown
SIP vs Lumpsum — Which Is Better?
| Aspect | SIP (Systematic Investment) | Lumpsum (One-Time) |
|---|---|---|
| Capital Required | Small monthly amounts | Large one-time amount |
| Market Timing Risk | Low — averaged out | High — entry point matters |
| Rupee-Cost Averaging | Yes — buys more units when prices fall | No — single purchase price |
| Discipline Required | Auto-debit enforces discipline | Requires lump-sum availability |
| Best For | Salaried investors, beginners | Inheritance, bonus, business proceeds |
| Historical Returns | 10-12% CAGR in equity (long-term) | Similar return; higher variance |
| Tax Implication | Each SIP has own holding period | Single holding period |
Step-Up SIP — Power of Annual Increase
Most investors start a SIP and forget about it. But as your income grows, so should your SIP. A step-up SIP increases your monthly contribution by 5-10% each year — automatically. Example: Starting SIP ₹10,000/month at 12% return for 25 years.
| Step-Up Rate | Total Invested | Final Corpus | Wealth Multiplier |
|---|---|---|---|
| 0% (flat ₹10K) | ₹30 lakh | ₹1.71 crore | 5.7x |
| 5% annual step-up | ₹57 lakh | ₹2.61 crore | 4.6x |
| 10% annual step-up | ₹1.18 crore | ₹4.20 crore | 3.6x |
| 15% annual step-up | ₹2.46 crore | ₹7.05 crore | 2.9x |
A 10% step-up nearly TRIPLES your final corpus vs flat SIP — at the cost of higher cumulative contribution. Most platforms (Coin, Kuvera, Groww, ETMoney) offer step-up SIP. Highly recommended.
Worked Examples
Example 1: 30-Year-Old, ₹15K SIP, 25-Year Horizon
Target: ₹3 crore retirement corpus by age 55. Expected return: 12% CAGR. SIP needed: ₹15,800/month for 25 years. Total contribution: ₹47.4 lakh. Final corpus: ₹3.0 crore. Compounding multiplier: 6.3x.
Example 2: ₹50 Lakh Corpus in 15 Years
Required SIP: ~₹10,000/month at 12% return. Total invested: ₹18 lakh. Compounding contribution: ₹32 lakh.
Example 3: Bear Market Resilience
If your SIP runs through a bear market (e.g., 2008-09 -50% drawdown), you'd actually accumulate MORE units at lower prices. Indian SIPs running through COVID 2020 dip earned ~14-15% XIRR over the next 4 years — outperforming pre-crash SIPs.
Common SIP Mistakes
- Stopping in market downturns: The worst time to stop SIP. Continue / increase contribution.
- Picking based on past returns alone: Top-quartile fund of last 5 years often becomes bottom-quartile in next 5. Choose process + manager, not just returns.
- Too many funds: 5-7 funds across categories is enough. Beyond that, returns dilute.
- Regular vs Direct: Direct plans save 0.5-1.5% expense ratio = 15-25% more wealth over 20 years.
- SIP without goal: Tie each SIP to a specific goal (retirement, child education, house) with target amount and horizon.
- Forgetting step-up: A static SIP loses value as income/inflation grow. Set up 5-10% annual increment.
SIP Tax Treatment in India
| Fund Type | Hold Period | Tax Rate |
|---|---|---|
| Equity-Oriented (≥65% equity) | < 12 months | 20% STCG (post Budget 2024) |
| Equity-Oriented (≥65% equity) | ≥ 12 months | 12.5% LTCG above ₹1.25L/year |
| Debt funds (post-April 2023) | Any | Slab rate (indexation removed) |
| ELSS (Equity Linked Savings) | 3-year lock-in | 12.5% LTCG above ₹1.25L |
| Hybrid Equity (≥65% equity) | Equity rules | Same as equity funds |
Each SIP instalment has its own holding period. The earliest-purchased units (FIFO) get redeemed first. So if you started SIP in 2020 and redeem in 2025, the 2020 units have 5-year holding (LTCG), while 2024 units may have STCG.
More FAQs
Can I pause my SIP for a few months?
Yes — most AMCs allow you to pause SIP for up to 3-6 months online. After the pause period, it resumes automatically. Useful during cash crunches without losing the systematic discipline.
What's a good SIP amount to start with?
Start with at least 10-15% of your take-home salary. The minimum SIP amount is ₹100-500 depending on the fund. Most experts recommend ₹5,000/month minimum for meaningful long-term wealth.
How many SIPs should I have?
5-7 across categories: 1-2 Large/Flexi-Cap, 1-2 Mid-Cap, 1 Small-Cap, 1 International (NASDAQ/S&P 500), 1 Gold ETF. Beyond this, returns dilute and tracking becomes complex.
Can I take a loan against SIP investments?
Yes — banks offer "Loan Against Securities" (LAS) up to 50-70% of mutual fund value. Interest 9-12%. Useful for short-term needs without disrupting your SIP.
Should I prefer dividend or growth option?
Growth option for long-term wealth building. Dividends declared by AMC are unpredictable and now taxed at slab rate (since Budget 2020). Growth option lets compounding work fully.
What is "Trigger SIP"?
SIP that activates only when specific market conditions are met (e.g., NIFTY below 18,000 or P/E below 22). Helps deploy more during dips. Available on platforms like Edelweiss, ICICI Direct. Best as supplement to regular SIP, not replacement.
Can I invest in international funds via SIP?
Yes. Motilal Oswal NASDAQ 100 FoF, S&P 500 funds, etc. allow SIPs. Provides geographic diversification. Taxed as debt funds post-April 2023 (slab rate).