How Much Will Your SIP Grow? Formula, Tables and Step-Up SIP

If you invest ₹5,000 at the start of every month and the fund earns a steady 12% a year, the SIP calculator shows ₹11,61,695 after 10 years (you put in ₹6 lakh) and ₹49,95,740 after 20 years (you put in ₹12 lakh). At 8% a year the same SIP reaches ₹9,20,828 and ₹29,64,736. These returns are planning assumptions, not promises: equity fund returns change every year and can be negative.

Below: the exact formula the calculator uses, tables for ₹1,000 to ₹10,000 a month, step-up SIPs, XIRR vs CAGR, and how SIP gains are taxed in Tax Year 2026-27.

The formula behind the SIP calculator

The calculator treats a SIP as equal monthly payments, each made at the start of the month, all growing at the same monthly rate. The future value is:

FV = P × [((1 + i)^n − 1) ÷ i] × (1 + i)

• P is the monthly instalment.
• i is the monthly rate: the yearly return ÷ 12 ÷ 100. For 12% a year, i = 0.01, or 1% a month.
• n is the number of instalments: years × 12.
• The final × (1 + i) is there because each instalment goes in at the start of the month and earns that month's return too.

Worked example: ₹5,000 a month for 10 years at 12%.

1. i = 12 ÷ 12 ÷ 100 = 0.01, and n = 10 × 12 = 120.
2. (1.01)^120 = 3.30039, that is, 1.01 multiplied by itself 120 times.
3. (3.30039 − 1) ÷ 0.01 = 230.039.
4. 230.039 × 1.01 = 232.339.
5. 232.339 × ₹5,000 = ₹11,61,695. You invested 120 × ₹5,000 = ₹6,00,000, so the gain is ₹5,61,695.

Another way to see it: each instalment grows on its own. The first ₹5,000 is invested for all 120 months and becomes ₹5,000 × 1.01^120 = ₹16,502. The last ₹5,000 is invested for one month and becomes ₹5,050. Add up all 120 instalments and you get ₹11,61,695.

Why other calculators show slightly different numbers

Two settings explain most differences. Some calculators assume each payment is made at the end of the month and leave out the final × (1 + i); for the same example they show ₹11,50,193, exactly 1% less. And this calculator divides the yearly rate by 12, so "12%" means 1% a month, which compounds to about 12.68% over a full year. If you want an effective 12% a year instead, enter 11.39%: ₹5,000 a month for 10 years then gives ₹11,20,408.

The calculator assumes the same return every month and ignores costs and tax. Enter a return that is already after fund expenses, and work out tax separately (see below).

How much ₹1,000, ₹5,000 and ₹10,000 a month can grow

These values come straight from the SIP calculator at an illustrative 12% a year. The formula is proportional, so ₹10,000 a month always gives exactly twice the ₹5,000 figure.

Here is the ₹5,000 SIP at 8% and at 12%, next to the money you actually put in:

Two things stand out.

• Time does most of the work. At 12%, the gain over the first 15 years is ₹16,22,880. In the next five years the SIP grows by another ₹24,72,860, of which only ₹3,00,000 is new money. That leaves ₹21,72,860 of growth in five years, more than in the first fifteen combined.
• Starting late is expensive. Run the SIP for 15 years instead of 20 and you end with ₹25,22,880 instead of ₹49,95,740. Catching up in 15 years needs about ₹9,901 a month.

What return should you assume?

Nobody knows what an equity fund will earn over the next 10 or 20 years. The calculator needs one steady number, but real returns arrive unevenly, with falls in some years and big rises in others. Over 20 years, 8% gives ₹29.6 lakh and 12% gives ₹50 lakh from the same ₹12 lakh, so treat the rate as a scenario and test three: cautious (say 8%), middle (10%) and hopeful (12%). For a debt fund, use a figure close to current deposit rates.

Uneven returns hurt most near the end. A 20% fall in the final year of the 10-year example would cut ₹11,61,695 by ₹2,32,339, about 41% of the ₹5,61,695 gain, because by then the corpus is at its largest. That is why people saving for a fixed date often shift money to safer options in the last two or three years.

Inflation shrinks the result too. At 6% a year, prices multiply by about 3.21 over 20 years (the inflation calculator turns ₹1 lakh into ₹3,20,714), so ₹49,95,740 in 20 years buys roughly what ₹15.6 lakh buys now. See what inflation does to your savings for real returns.

Step-up SIP: raising the instalment every year

A step-up (or top-up) SIP raises the monthly amount once a year, by a fixed percentage or rupee amount, so your investing keeps pace with your salary. Many fund houses offer this when you register the SIP; you can also start a second SIP for the increase.

The site's SIP calculator has no step-up field, but two of its tools can do the job. Treat each year's instalments as a one-year SIP, then let that year's value grow to the end with the compound interest calculator set to 12 compoundings a year. Here is a 3-year example at 12%, starting at ₹5,000 and stepping up 10% a year:

A flat ₹5,000 SIP over the same three years gives ₹2,17,538.24 from ₹1,80,000. We checked the step-up total a second way, with a month-by-month script, and it matches to the paisa.

Over 20 years the gap becomes large. The same two methods give these values at 12%:

The 10% step-up almost doubles the final value, but you also put in nearly three times as much money. It works when your income rises; a step-up you cannot keep paying is worse than a smaller flat SIP you can. At 8%, the same 10% step-up gives ₹66,37,456.

XIRR vs CAGR: reading the return on your statement

CAGR (compound annual growth rate) answers one question: if a single amount grew from A to B in N years, what steady yearly rate does that equal? The formula is (B ÷ A)^(1/N) − 1. ₹1 lakh that becomes ₹2 lakh in 6 years has a CAGR of 12.25%. CAGR suits a lumpsum, or describing how a fund's NAV has moved.

It is wrong for a SIP, because your money did not all go in on day one. In the 10-year example, ₹6 lakh became ₹11,61,695. Put those two numbers into the CAGR formula and you get 6.83% a year, which badly understates the return: the average rupee was invested for only about five years.

XIRR (extended internal rate of return) handles this. It finds the one yearly rate that, applied to each instalment from its own date, adds up to today's value. For the calculator's 12% example, the XIRR comes to about 12.7%, which is the 1% a month compounded over a year. Fund statements and apps usually show XIRR for SIPs. In Excel or Google Sheets, list each instalment as a negative number with its date, add the current value as a positive number with the current date, and use =XIRR(values, dates).

You may also see absolute return: total gain ÷ total invested, here ₹5,61,695 ÷ ₹6,00,000 = 93.6%. That covers the whole 10 years, not one year, so never compare it with an FD rate.

How SIP gains are taxed (Tax Year 2026-27)

You pay tax only when you redeem units, and only on the gain. As of October 2026:

• Equity funds, units held more than 12 months: long-term gains are taxed at 12.5%, but only on your total long-term equity gains above ₹1.25 lakh in the year.
• Equity funds, units held 12 months or less: short-term gains are taxed at 20%.
• Debt funds bought on or after 1 April 2023: all gains are taxed at your slab rate, however long you hold them.
• Add 4% cess, and surcharge at high incomes.

Each SIP instalment is a separate purchase with its own 12-month clock, and units are redeemed first in, first out. If you redeemed the whole 10-year ₹5,000 SIP in one go, the last 12 instalments would be short-term:

1. Last 12 instalments: worth ₹64,047 (a one-year SIP), cost ₹60,000, short-term gain ₹4,047. Tax at 20% plus cess: about ₹842.
2. First 108 instalments: worth ₹10,97,649, cost ₹5,40,000, long-term gain ₹5,57,649. Taxable after the ₹1.25 lakh exemption: ₹4,32,649. Tax at 12.5% plus cess: about ₹56,244.
3. Total tax: about ₹57,086, leaving ₹11,04,609. The exemption applies per financial year and covers all your equity gains, so the real figure depends on your other gains and on when you redeem.

For whether to invest monthly or all at once, see lumpsum vs SIP: which is better and the lumpsum calculator. For a 5-year comparison with deposits, read RD vs FD vs SIP for ₹5,000 a month.

This article is general information, not investment or tax advice; the returns shown are illustrations, and real returns will differ.

Frequently asked questions

How much will a ₹5,000 SIP give in 10 years?

₹11,61,695 at a steady 12% a year and ₹9,20,828 at 8%, from ₹6 lakh invested. What you actually get depends on the returns the fund earns, which can be lower or higher.

How much SIP do I need for ₹1 crore?

At an assumed 12%, about ₹10,009 a month for 20 years (₹24 lakh invested) reaches ₹1 crore. Starting at ₹5,000 and stepping up 10% a year gets close, ₹99.4 lakh, in the same 20 years.

Why does my app show a different return from the calculator?

The calculator assumes a smooth return every month. Your app uses real NAVs on real dates and usually reports XIRR, so a recent rise or fall moves the figure a lot, especially in the first few years.

Can I stop a SIP whenever I want?

Yes. Stopping a SIP only stops new instalments; the units you already hold stay invested. An exit load may apply if you redeem soon after buying (the scheme documents give the period), and ELSS tax-saving funds lock each instalment for three years.

Sources: EthicalFusion SIP, compound interest, inflation and lumpsum calculators (figures as shown by the tools; step-up totals checked with a month-by-month script); Income-tax Act, 2025 and Finance Act, 2026 rates for mutual fund capital gains, Tax Year 2026-27.