💡 Toggle on to see how much more you need to invest to beat inflation and hit your goal in real terms.
💡 Formula: Maturity = P × (1 + r)ⁿ | P = principal, r = annual rate, n = years
| Year | Invested (Cumulative) | Returns | Total Value |
|---|
What is SIP (Systematic Investment Plan)?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly — typically every month — into a mutual fund. Rather than a large lump sum at once, SIP allows disciplined, small investments at regular intervals. It is regulated by SEBI and offered through AMFI-registered mutual funds across India.
As of 2025, India's monthly SIP inflows have crossed ₹25,000 crore. Even ₹500/month compounded over years builds meaningful wealth. For one-time investments, try our Lumpsum Calculator.
How Does SIP Work?
A fixed amount is auto-debited from your bank on a chosen date and invested at that day's NAV (Net Asset Value). You receive units proportional to the NAV. Because NAV fluctuates, you buy more units when prices fall and fewer when they rise — this is Rupee Cost Averaging, a built-in risk reducer.
SIP Formula
SIP maturity is calculated using the Future Value of Annuity Due formula:
r = Monthly rate (Annual rate ÷ 12) | n = Total months (Years × 12)
SIP Calculation Example
| Monthly SIP (P) | ₹5,000 |
| Annual Return | 12% |
| Monthly Rate (r) | 1% = 0.01 |
| Duration (n) | 120 months |
| Total Invested | ₹6,00,000 |
| Maturity Value | ₹11,61,695 |
| Profit | ₹5,61,695 (93.6% gain) |
SIP vs FD vs PPF — Which is Better in 2025?
Use our FD Calculator and PPF Calculator alongside this tool for a side-by-side comparison of all three options.
| Feature | SIP (Equity) | FD | PPF |
|---|---|---|---|
| Expected Returns | 10–15% p.a. | 6.5–7.5% p.a. | 7.1% p.a. (current) |
| Risk | Market risk | None | None |
| Lock-in | None (ELSS: 3 yr) | Penalty on exit | 15 years |
| Tax on Returns | LTCG 12.5% (>₹1.25L) | Slab rate | Fully tax-free |
| Inflation Beating | ✅ Very likely | ❌ Marginal | ❌ Marginal |
| Best For | Long-term wealth creation | Capital protection | Tax saving + safety |
What Happens If You Increase SIP Every Year? (Step-up SIP)
A Step-up SIP increases your monthly amount by a fixed % each year — typically 10%, aligned with salary hikes. Try the Step-up toggle above to see the difference instantly.
| SIP Type | Starting Amount | 20-Year Corpus @ 12% |
|---|---|---|
| Flat SIP | ₹5,000/month | ₹49.9 Lakh |
| Step-up SIP (10%/yr) | ₹5,000/month | ₹1.2+ Crore |
That's more than double the corpus — simply by increasing SIP 10% each year. One of the most underused wealth strategies in personal finance.
What Happens If You Stop Your SIP?
Units already purchased remain invested and continue to earn market returns. However, stopping early has a significant wealth cost. If you're facing a cash crunch, most platforms let you pause SIP for 1–3 months rather than cancelling entirely.
| Scenario | ₹5,000/month @ 12% over 15 years |
|---|---|
| Complete 15 years | ₹25.2 Lakh |
| Stop after 5 years, stay invested 10 more | ~₹16.9 Lakh |
| Loss from stopping early | ~₹8.3 Lakh less wealth |
Real Return After Inflation — The Truth About SIP Wealth
India's average inflation is 5–6% p.a. A 12% SIP return gives a real return of ~6% — still comfortably ahead of FDs and PPF. Use the Inflation-Adjusted toggle above to see what your corpus is worth in today's money.
Example: ₹11.6 lakh corpus in 10 years at 6% inflation = only ₹6.5 lakh in today's purchasing power. This is why advisors recommend targeting 2–2.5× your nominal goal to account for inflation erosion.
Best SIP Fund Categories to Consider in India (2025)
Real fund returns vary widely. Here are the categories to explore (not a financial recommendation — consult a SEBI-registered advisor before investing):
| Fund Category | Typical 10-yr CAGR | Risk | Best For |
|---|---|---|---|
| Nifty 50 Index Fund | 12–14% | Moderate | Beginners, passive investors |
| Large Cap Equity | 11–13% | Moderate | Stable wealth building |
| Flexi Cap Fund | 12–15% | Moderate-High | Diversified growth |
| Mid Cap Fund | 14–18% | High | Aggressive long-term growth |
| ELSS (Tax Saving) | 12–15% | Moderate-High | Tax saving + wealth |
| Debt / Hybrid Fund | 7–10% | Low-Moderate | Stability, short-term goals |
Tip for beginners: A Nifty 50 index fund with 0.1–0.2% expense ratio is the optimal starting point. Low cost + broad diversification = most predictable long-term outcome.
How to Start a SIP in India (2025 Guide)
Starting a SIP takes under 10 minutes. Here's the complete process:
- Complete KYC (one-time): Submit PAN, Aadhaar, and a selfie on Groww, Zerodha Coin, Paytm Money, or an AMC website. KYC is valid across all platforms.
- Choose a fund: For beginners — a Nifty 50 index fund or a large-cap fund. Check its 5-year CAGR vs benchmark.
- Set your amount: Minimum ₹500/month. Rule of thumb: invest at least 20% of take-home salary.
- Set up auto-debit (NACH mandate): Choose a date (1st–28th). The SIP amount is auto-debited monthly — no manual action needed.
- Stay invested: Review performance once a year vs benchmark. Ignore short-term NAV dips.