SIP Calculator: How to Project Your Mutual Fund Corpus (With Formula and Tables)
A SIP calculator gives you a number. This guide explains what that number means, how it's computed, and why most investors misread it — because they use unrealistic return assumptions, ignore step-ups, and forget that ₹1 crore in 2045 is not ₹1 crore today.
Key Takeaways
- The SIP future value formula — FV = P × [((1+r)^n − 1)/r] × (1+r) — shows exactly how monthly amount, return rate, and time combine to produce a corpus. Time is the most powerful variable.
- A 10% annual step-up on a ₹10,000 SIP over 20 years at 12% produces ₹1.92 crore vs ₹98.9 lakh for a flat SIP — nearly double, from the same market return.
- Your assumed return matters more than anything else: using 15% instead of 11% makes your projected corpus 2.5× larger on paper — leading to severe under-saving when actual returns are lower.
- Inflation-adjust your target: ₹1 crore in today's money needs ₹3.2 crore in nominal terms 20 years from now at 6% inflation. Set goals in today's purchasing power.
- SIP projection answers the accumulation phase. After that, SWP (Systematic Withdrawal Plan) planning answers how long a corpus lasts during consumption — both halves matter for retirement planning.
In this article
- 1.What a SIP calculator actually computes — and what it doesn't
- 2.The SIP future value formula explained in plain terms
- 3.Worked example: ₹10,000/month × 20 years at 12% CAGR
- 4.Why the calculator's assumed return rarely matches your actual return
- 5.Step-up SIP: how 10%/year dramatically changes the outcome
- 6.Inflation adjustment: set your target in today's money, not 2045 money
- 7.The 3 variables you control: SIP amount, duration, fund return
- 8.SWP — the other half of SIP planning for the withdrawal phase
- 9.How to use FundSageAI's goal-based planner
- 10.Common SIP calculation mistakes and how to avoid them
1What a SIP Calculator Actually Computes — and What It Doesn't
A SIP calculator computes the future value of a series of equal monthly investments, assuming a fixed annual return rate, over a specified number of years. That's the full scope of what it does.
What it does not compute:
- —Your actual portfolio's real CAGR — which varies by fund, entry date, and market conditions
- —The impact of inflation on your purchasing power at the goal date
- —Tax deducted on redemption (LTCG at 12.5% or STCG at 20% reduces the net corpus)
- —The expense ratio drag over 20 years — a 0.5% difference in expense ratio compounds to a meaningful gap
- —Step-ups or irregular contributions — most basic calculators assume a fixed monthly amount
A calculator output is a mathematical projection, not a prediction. Its accuracy depends entirely on how realistic your return assumption is — which is why Section 4 is the most important section in this article.
2The SIP Future Value Formula Explained in Plain Terms
The standard formula used in all SIP calculators is the future value of an annuity due (payments at the beginning of each period):
FV = P × [((1 + r)ⁿ − 1) / r] × (1 + r)
P
Monthly SIP amount (₹)
e.g., ₹10,000
r
Monthly return rate
Annual CAGR ÷ 12 (e.g., 12% ÷ 12 = 1%)
n
Number of monthly instalments
Years × 12 (e.g., 20 years = 240)
The formula is an annuity due (each instalment invests at the beginning of the month, earning interest for the full month). Some calculators use an ordinary annuity (end of month) — the difference is small but noticeable over long periods.
The (1 + r)ⁿ term is where compounding lives. Every extra year in n, or every extra 0.5% in r, has a disproportionately large effect on FV — which is why long-duration SIPs in higher-return funds produce dramatically different outcomes than short ones.
3Worked Example: ₹10,000/Month × 20 Years at 12% CAGR
Let's compute it step by step.
(1.01)²⁴⁰ = 9.930
[((9.930 − 1) / 0.01)] × 1.01 = 902.0
FV = 10,000 × 902.0 = ₹98.9 lakh
Total invested
₹24 lakh
Total returns (gains)
₹74.9 lakh
Notice that over 20 years, the fund returns (₹74.9 lakh) are 3× the total amount invested (₹24 lakh). This is the compounding effect — and it's why the duration variable is so powerful.
SIP corpus table — flat monthly amount at various rates and durations
| Monthly SIP | 10 yrs @ 10% | 15 yrs @ 11% | 20 yrs @ 12% | 25 yrs @ 12% |
|---|---|---|---|---|
| ₹5,000 | ₹10.2L | ₹23.2L | ₹49.5L | ₹94.9L |
| ₹10,000 | ₹20.5L | ₹46.5L | ₹98.9L | ₹1.90Cr |
| ₹20,000 | ₹41.0L | ₹92.9L | ₹1.98Cr | ₹3.79Cr |
| ₹30,000 | ₹61.5L | ₹1.39Cr | ₹2.97Cr | ₹5.69Cr |
4Why the Calculator's Assumed Return Rarely Matches Your Actual Return
Return assumption is the single most impactful variable in a SIP projection — more than the SIP amount, more than the duration. Even a 2% difference compounds massively over 20 years.
Effect of 2% return difference on ₹10,000/month × 20 years
| Assumed CAGR | Projected Corpus | Reality check |
|---|---|---|
| 18% (overoptimistic) | ₹2.84 Cr | No diversified equity fund has delivered 18% rolling 5-year CAGR consistently |
| 15% (optimistic) | ₹1.52 Cr | Possible in small-cap bull runs but not sustained; creates unrealistic expectations |
| 12% (moderate) | ₹98.9 L | Reasonable for flexi-cap / large-mid cap over 15+ year horizons |
| 10% (conservative) | ₹75.9 L | Safe assumption for large-cap or balanced hybrid funds |
What return rate to assume by fund category (historical 5-year rolling, indicative)
| Fund Category | Conservative estimate | Moderate estimate |
|---|---|---|
| Large-cap / Index (Nifty 50) | 9% | 10–11% |
| Flexi-cap / Multi-cap | 10% | 11–12% |
| Large & mid-cap | 10% | 12% |
| Mid-cap | 11% | 13% |
| Small-cap | 12% | 14–15% |
| Balanced hybrid / BAF | 9% | 10–11% |
| Debt / Liquid | 6–7% | 7–8% |
5Step-Up SIP: How 10%/Year Dramatically Changes the Outcome
A step-up SIP increases your monthly contribution by a fixed percentage each year. Starting at ₹10,000 with a 10% annual step-up means: Year 1 = ₹10,000/month, Year 2 = ₹11,000/month, Year 3 = ₹12,100/month, and so on.
| Strategy | Starting SIP | Total invested | Corpus (20 yrs, 12%) |
|---|---|---|---|
| Flat SIP | ₹10,000/month | ₹24 lakh | ₹98.9 lakh |
| 10% annual step-up | ₹10,000/month | ₹68.7 lakh | ₹1.92 crore |
| 15% annual step-up | ₹10,000/month | ₹1.09 crore | ₹2.97 crore |
6Inflation Adjustment: Set Your Target in Today's Money, Not 2045 Money
The most common planning mistake: setting a corpus target of "₹1 crore" without specifying when that ₹1 crore needs to maintain purchasing power. ₹1 crore in 2045 is worth significantly less than ₹1 crore today.
Inflation-adjusted target: what you actually need in nominal terms (at 6% annual inflation)
| Goal in today's money | In 10 years | In 15 years | In 20 years | In 25 years |
|---|---|---|---|---|
| ₹25 lakh (college) | ₹44.8L | ₹59.9L | ₹80.2L | ₹1.07Cr |
| ₹50 lakh | ₹89.5L | ₹1.20Cr | ₹1.60Cr | ₹2.15Cr |
| ₹1 crore | ₹1.79Cr | ₹2.40Cr | ₹3.21Cr | ₹4.29Cr |
| ₹2 crore (retirement) | ₹3.58Cr | ₹4.79Cr | ₹6.41Cr | ₹8.58Cr |
The correct workflow: (1) decide what you need in today's money, (2) convert to the future nominal amount using the inflation formula, (3) use that nominal amount as your SIP calculator's target. FundSageAI's goal planner does this automatically — you input goals in today's rupees and it computes the inflation-adjusted corpus and required SIP.
7The 3 Variables You Control: SIP Amount, Duration, Fund Return
Every SIP projection has exactly three levers. Understanding their relative impact tells you where to focus your energy when a projection falls short of your target.
Duration (most powerful)
Compounding is exponential. Adding 5 more years to a 15-year SIP roughly doubles the corpus at 12% return — not a 33% increase. If you're behind on your goal, starting earlier (or not stopping) is the highest-leverage action.
SIP amount (linear impact)
Doubling your SIP doubles your corpus — it's a linear relationship. This is within your control if your income grows. Step-up SIPs make this automatic. The fastest lever when your income has headroom.
Fund return (partially within control)
You choose the fund category and quality. Choosing a consistently performing flexi-cap over an average one might add 1-2% CAGR — which over 20 years significantly changes the outcome. But chasing high returns often means high volatility risk.
8SWP — The Other Half of SIP Planning for the Withdrawal Phase
A SIP calculator only handles accumulation — building a corpus. Once you reach the goal date (retirement, child's education, etc.), you need a withdrawal plan. This is where SWP (Systematic Withdrawal Plan) comes in.
An SWP withdraws a fixed monthly amount from your fund, while the remaining corpus continues to grow. The key question: for a ₹2 crore corpus at 8% return, how much can you withdraw monthly for 25 years without depleting it?
SWP illustration — ₹2 crore corpus, 8% annual return
| Monthly withdrawal | Corpus after 15 yrs | Corpus after 20 yrs | Corpus after 25 yrs |
|---|---|---|---|
| ₹80,000/month | ₹3.24Cr | ₹4.14Cr | ₹4.59Cr |
| ₹1,20,000/month | ₹1.65Cr | ₹1.18Cr | ₹0 (depleted ~yr 23) |
| ₹1,60,000/month | ₹0.52Cr | ₹0 (depleted ~yr 17) | — |
Indicative projections at 8% annual return on remaining corpus. Actual returns vary.
9How to Use FundSageAI's Goal-Based Planner
FundSageAI's planner does what generic SIP calculators don't: it uses your actual portfolio's return rate, not a hypothetical one.
Set your goal in today's money
Name the goal (retirement, child's education, home purchase), enter the amount in today's rupees, and set the target date. FundSageAI computes the inflation-adjusted nominal target automatically.
Assign funds to the goal
Link existing funds from your portfolio to the goal. FundSageAI uses each fund's actual rolling 3-year return from your NAV history — not a generic 12% assumption.
Get the required SIP
The planner computes the monthly SIP needed across the assigned funds to hit the inflation-adjusted target. It shows current corpus trajectory vs target on a timeline chart.
Track monthly
As NAVs update daily, your corpus projection updates automatically. You can see whether you're ahead or behind the target path and adjust the SIP amount if needed.
10Common SIP Calculation Mistakes and How to Avoid Them
Using 15–18% return assumption
Use historical category averages: 10–11% for large-cap, 11–12% for flexi-cap. Optimistic assumptions lead to under-saving.
Ignoring step-up potential
A 10% annual step-up nearly doubles the 20-year corpus vs a flat SIP. Set up auto step-up at the time of SIP registration — don't add it manually later.
Setting a nominal corpus target without inflation adjustment
Always ask: 'Is this amount in today's money?' Convert to future nominal value using 6% inflation assumption before running the SIP calculation.
Pausing SIP during market downturns
SIP pauses are irreversible compounding losses. A ₹10,000 SIP paused for 12 months during a bear market does not just lose ₹1.2 lakh — it loses the compounding on those ₹1.2 lakh over the remaining investment horizon.
Planning only the accumulation phase
Your SIP corpus is only useful if you have a withdrawal plan. Model the SWP phase before you hit the goal date — not after.
Frequently Asked Questions
What is the formula used in a SIP calculator?+
The standard SIP future value formula is: FV = P × [((1 + r)^n − 1) / r] × (1 + r), where P is the monthly SIP amount, r is the monthly return rate (annual CAGR ÷ 12), and n is the total number of monthly instalments. For example, ₹10,000/month for 20 years (240 months) at 12% annual return: r = 0.12/12 = 0.01, n = 240. FV = 10,000 × [((1.01)^240 − 1) / 0.01] × 1.01 = approximately ₹98.9 lakh. This formula assumes a constant monthly return and that each instalment is invested at the beginning of the month (annuity due).
What return should I assume in a SIP calculator for Indian mutual funds?+
There are no guaranteed returns in mutual funds, but historical 3-year rolling return ranges give a realistic expectation range: Large-cap funds: 10–11% CAGR historically (5-year rolling average); Flexi-cap / multi-cap: 11–12%; Mid-cap: 12–14%; Small-cap: 13–16% (high variance); Balanced hybrid: 9–11%. A conservative planning rate for long-term goals is 10–11% for equity funds. Using 15–18% is extremely optimistic and leads to under-saving. FundSageAI uses each fund's actual rolling 3-year return from your portfolio — not a generic assumption — to project your goal corpus.
How does a step-up SIP work and how much difference does it make?+
A step-up SIP (also called top-up SIP) automatically increases your SIP amount by a fixed percentage each year — typically 10%. This is designed to match income growth: if your salary rises 8–10% per year, stepping up your SIP keeps your savings rate constant instead of letting it shrink as a fraction of income. The compounding effect is dramatic: ₹10,000/month flat for 20 years at 12% = ₹98.9 lakh. The same with a 10% annual step-up = ₹1.92 crore — nearly double the corpus from the same 12% market return, simply by growing the SIP amount. Most modern AMCs and platforms allow you to set up auto step-ups when creating a SIP mandate.
How do I account for inflation in my SIP corpus target?+
Inflation erodes the real purchasing power of your target corpus. If your goal is to accumulate ₹1 crore in 20 years for retirement, you need to ask: is that ₹1 crore in today's money or 2045 money? At 6% annual inflation, ₹1 crore today becomes ₹3.2 crore in 20 years just to maintain the same purchasing power. So if you need ₹1 crore worth of spending power in 2045, your nominal corpus target should be ₹3.2 crore. The inflation-adjusted formula: Real corpus needed = Target (today's value) × (1 + inflation rate)^years. Always set your goal in today's purchasing power and let the calculator work backward to the nominal SIP required.
What is the difference between a SIP calculator and a lump sum calculator?+
A SIP calculator computes the future value of periodic (monthly) investments using the annuity formula: FV = P × [((1 + r)^n − 1) / r] × (1 + r). A lump sum calculator computes the future value of a single investment: FV = PV × (1 + r)^n. For the same total amount invested, a SIP typically gives a different (often lower) corpus than a lump sum because the early SIP instalments have less time to compound — while later instalments barely compound at all. However, SIPs are more practical for salaried investors and reduce timing risk through rupee-cost averaging. The combination of a lump sum + SIP is sometimes called a 'hybrid investment plan.'
How is SWP (Systematic Withdrawal Plan) the other half of SIP planning?+
SIP builds the corpus during the accumulation phase. SWP (Systematic Withdrawal Plan) deploys it during retirement or the goal's consumption phase. In an SWP, you instruct the AMC to redeem a fixed amount (or fixed number of units) from your fund each month, providing a regular income stream. The fund's remaining units continue to grow. For a retirement plan, SWP planning asks: given a ₹2 crore corpus, how much can I withdraw monthly for 25 years without depleting it, assuming the fund continues at 8%? This is mathematically the inverse of the SIP calculation — an annuity withdrawal formula. FundSageAI's planner handles both the accumulation (SIP projection) and withdrawal (SWP projection) phases.
Sources & References
- AMFI India — Historical category-level return data and NAV archives
- Nifty 50 Total Return Index — 20-year CAGR performance data
- RBI Inflation data — CPI average used for 6% inflation assumption
- SEBI mutual fund regulations — SIP / SWP mandate guidelines
Plan Your SIP with Your Actual Fund Returns
FundSageAI's goal planner calculates the SIP you need for each goal using your portfolio's actual historical returns — not a generic 12% assumption. Set the goal, track the corpus, adjust the SIP.
Plan My SIP Goals