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Formula Details
Systematic Investment Plan (SIP) returns are computed using the Future Value of an Annuity Due formula, taking compounding into account.
FV
Future Value of the total accumulated wealth
P
Monthly investment amount
i
Periodic interest rate (Annual Rate / 12 / 100)
n
Total number of monthly contributions (Years × 12)
Reference Deck
Sample projections under common configurations.
| Scenario | Short-Term | Medium-Term | Long-Term |
|---|---|---|---|
| ₹5,000 Monthly SIP (12% CAGR) | 3 Years: ₹2.17 Lakhs | 5 Years: ₹4.12 Lakhs | 10 Years: ₹11.61 Lakhs |
| ₹10,000 Monthly SIP (12% CAGR) | 3 Years: ₹4.34 Lakhs | 5 Years: ₹8.24 Lakhs | 10 Years: ₹23.23 Lakhs |
| ₹15,000 Monthly SIP (15% CAGR) | 3 Years: ₹6.85 Lakhs | 5 Years: ₹13.45 Lakhs | 10 Years: ₹41.79 Lakhs |
FAQs
Unlike simple interest, SIP compound returns are calculated on a monthly compounding frequency. Every month's contribution gains interest over the remaining horizon, accumulating exponentially.
Yes, equity mutual fund returns are taxed based on the holding period. Short-Term Capital Gains (STCG) under 1 year are taxed at 20%, while Long-Term Capital Gains (LTCG) over 1 year are taxed at 12.5% on gains exceeding ₹1.25 Lakhs per financial year.
Yes, you can use a Step-Up SIP where you increase your monthly contribution by a fixed percentage (typically 10%) every year to double your final accumulated wealth.
Albert Einstein is reputed to have said, "Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."
