What is SIP and how does it work?

SIP (Systematic Investment Plan) is a method of investing a fixed amount in a mutual fund at regular intervals (usually monthly). Each month, your SIP amount buys mutual fund units at the current NAV (Net Asset Value). Over time, you benefit from rupee cost averaging — buying more units when markets are low and fewer when high — reducing the average cost per unit.

How is SIP return calculated?

SIP maturity value = M × ((1+r)^n – 1) / r × (1+r), where M = monthly SIP amount, r = monthly rate (annual rate ÷ 12 ÷ 100), n = total months. For ₹5,000/month at 12% for 10 years: r = 0.01, n = 120. Maturity ≈ ₹11.61 lakhs on ₹6 lakh invested.

Step-Up SIP (also called Top-Up SIP) allows you to increase your monthly SIP amount by a fixed percentage each year. For example, starting ₹5,000/month with 10% annual step-up means you invest ₹5,500 in year 2, ₹6,050 in year 3, and so on. Step-up SIP dramatically increases your final corpus compared to a regular SIP.

What is the difference between SIP and lump sum investment?

SIP: Invest a fixed amount monthly. Benefits from rupee cost averaging. Lower risk as investment is spread over time. Best for regular income earners. Lump Sum: Invest entire amount at once. Higher risk but potentially higher returns if markets rise. Ideal if you have a large windfall. Most experts recommend SIP for retail investors for disciplined, risk-managed investing.

Which mutual fund gives the best SIP returns?

Historically (10-year average): Small Cap funds: 18–22% p.a., Mid Cap funds: 15–18%, Large Cap funds: 12–15%, ELSS (Tax Saving): 12–16%, Balanced/Hybrid: 10–13%, Debt funds: 6–8%. Past returns don't guarantee future performance. Diversify across categories based on your risk profile and investment horizon.

How much SIP do I need to get ₹1 crore?

To accumulate ₹1 crore at 12% annual returns: 10 years → ₹43,000/month, 15 years → ₹19,800/month, 20 years → ₹10,000/month, 25 years → ₹5,300/month, 30 years → ₹2,860/month. Starting earlier dramatically reduces the monthly investment needed due to the power of compounding. Use the Goal Planner mode in this calculator.

XIRR (Extended Internal Rate of Return) is the annualized return considering the timing of each SIP instalment. Since each instalment is invested at different times and earns returns for different durations, XIRR gives a more accurate return than simple average. XIRR is shown by mutual fund account statements and apps like Zerodha, Groww, etc.

Is SIP better than FD (Fixed Deposit)?

SIP in equity mutual funds historically returns 12–18% vs FD's 6.5–7.5%. However, SIP returns are not guaranteed and depend on market performance, while FD gives assured returns. For goals beyond 5 years, SIP in equity funds has typically outperformed FD significantly after accounting for inflation and taxes. For short-term goals or risk-averse investors, FD or debt mutual funds are better.

What happens if I stop SIP in between?

Stopping a SIP doesn't mean losing your invested money. Your existing units remain invested and continue to grow at market returns. You can restart the SIP anytime. However, stopping reduces the compounding benefit. Pausing rather than stopping (most fund houses allow 1–3 month pause) is better if you face temporary cash flow issues.

How does inflation affect SIP returns?

Inflation reduces the purchasing power of your maturity corpus. Real return = ((1 + nominal return) / (1 + inflation rate)) – 1. At 12% returns and 6% inflation: real return ≈ 5.66%. This calculator shows both nominal returns and inflation-adjusted real value to help you set realistic financial goals.

What is the minimum SIP amount?

Most mutual funds allow SIP starting from ₹100–₹500 per month. Popular AMCs like SBI MF, HDFC MF, ICICI Prudential, Axis MF, Mirae Asset allow SIPs from ₹500/month. Some specialized funds may require ₹1,000/month minimum. There is no maximum limit — you can invest any amount based on your financial capacity.

SIP Calculator 2026 – Mutual Fund SIP Returns, Step-Up SIP, Goal Planner

Monthly SIP Amount ₹5,000

₹

Lump Sum Amount ₹1,00,000

₹

Target Corpus ₹1,00,00,000

₹

Expected Annual Return 12%

% p.a.

Investment Duration 10 Years

Years

Step-Up SIP Increase SIP annually

Inflation Rate (for real return) 6%

% p.a.

Estimated Maturity Value

₹11,61,695

₹5,000/month for 10 years at 12% p.a.

Invested: ₹6,00,000 Gain: ₹5,61,695

₹6,00,000

Amount Invested

₹5,61,695

Est. Returns

93.6%

Wealth Gained

₹9,14,000

Real Value (post-inflation)

—

Effective CAGR

Amount Invested

₹6,00,000

Estimated Returns

₹5,61,695

Real Value (after inflation)

₹9,14,000

📊 Year-by-Year Growth

Invested

Returns

Year-by-Year Breakdown

Year	SIP Amount	Invested So Far	Est. Returns	Total Corpus

Mutual Fund SIP Returns by Category (Historical Average)

Historical average returns for major mutual fund categories in India (10-year CAGR). Past performance does not guarantee future returns. Always consult a financial advisor before investing.

Fund Category	Avg 10Y Return	Risk Level	Best For
🔵 Large Cap	12–15%	Low-Medium	Conservative investors, 5+ years
🟡 Mid Cap	15–18%	Medium-High	Moderate risk, 7+ years
🟠 Small Cap	18–22%	High	Aggressive investors, 10+ years
🟣 ELSS (Tax Saving)	12–16%	Medium	Tax saving u/s 80C, 3yr lock-in
🟤 Balanced/Hybrid	10–13%	Low-Medium	First-time investors, 3+ years
⚪ Debt Funds	6–8%	Very Low	Short-term goals, capital preservation

SIP Calculator 2026

📊 Year-by-Year Growth

Mutual Fund SIP Returns by Category (Historical Average)

Frequently Asked Questions — SIP Calculator