SIP Calculator with Step-Up
Project the future value of a monthly SIP, add an annual step-up to model rising income, and compare against the lumpsum that would achieve the same result.
Equity returns are not guaranteed. 12% is a common long-term planning assumption for diversified Indian equity funds; use a lower figure to be conservative.
How SIP returns are calculated
A systematic investment plan invests a fixed amount every month, and each instalment compounds from its own date. The calculator applies the standard future-value-of-annuity method using the effective monthly rate derived from your annual return assumption:
A = monthly SIP, i = monthly rate, n = months
Why step-up SIPs are powerful
Most people’s income grows every year, so a fixed SIP quietly shrinks as a share of earnings. A step-up SIP raises the instalment by a fixed percentage annually. The effect is large: ₹10,000 per month at 12% for 15 years builds about ₹50 lakh, but the same SIP with a 10% annual step-up builds roughly ₹80 lakh, with the extra contributions concentrated in later, higher-earning years. Try both above and compare the totals.
Reading the results honestly
The projection assumes a smooth constant return, but markets deliver lumpy returns around an average. Over long periods the smooth model is a reasonable planning tool; over 2 or 3 years it can be badly wrong in either direction. That is why SIPs suit goals at least 5 to 7 years away. Also note the wealth gained figure is pre-tax: Indian equity fund gains above the annual exemption are taxed at the prevailing LTCG rate on redemption.
The lumpsum comparison
Under the result, the tool shows the one-time investment that would reach the same value at the same return. This is useful when you receive a bonus and wonder whether to invest it at once or spread it out: mathematically, investing earlier wins if returns are positive on average, while SIPs win on discipline and rupee-cost averaging in volatile markets.
Worked example: planning a ₹1 crore goal
Say you want ₹1 crore in 15 years for a child’s education. At 12%, a flat SIP needs about ₹20,000 per month. With a 10% annual step-up you can start at roughly ₹13,000 and reach the same goal, because your contributions grow with your income. Try it above: set the target period, adjust the monthly amount until the projected value crosses ₹1 crore, then add the step-up and watch the required starting amount fall. Planning backwards from the goal is the single most useful way to use this tool.
What the projection deliberately leaves out
Expense ratios are already inside a fund’s published returns, so do not subtract them again. Exit loads apply only to early redemptions. Taxes, however, are not included: long-term equity gains above the annual exemption are taxed on redemption, so a goal-based plan should either target a slightly higher corpus or assume a rate about half a point lower than your gross expectation. And remember rebalancing: as the goal approaches, shifting from equity to debt protects the corpus from a badly timed crash in the final years.
Frequently asked questions
What return should I assume for a SIP?
For diversified Indian equity funds, 10% to 12% a year is a common long-term planning range; debt funds are closer to 6% to 8%. Assumptions are not guarantees, so plan with a conservative number and treat anything above it as a bonus.
What is a step-up SIP?
A SIP whose monthly amount increases by a fixed percentage every year, usually matching salary growth. Even a 10% annual step-up can raise the final corpus by 50% or more over 15 years compared to a flat SIP.
Is SIP better than lumpsum?
If you already have the money, investing it earlier has higher expected value. SIPs shine when money arrives monthly, and they reduce the risk of investing everything at a market peak. The tool shows the equivalent lumpsum so you can compare both routes.
Are SIP returns guaranteed?
No. Mutual fund returns depend on markets. This calculator projects a scenario based on your assumed return; actual results will differ year to year. Check your real, realised return with our XIRR calculator once you have been investing for a while.