A SIP (Systematic Investment Plan) lets you invest a fixed amount in mutual funds every month — automatically. It's the single most powerful wealth-building tool available to salaried Indians. But how much should you invest? What returns can you realistically expect? And how do you use an SIP calculator correctly?
This guide answers all of it with real numbers.
What is SIP? How Does It Work?
When you start a SIP of ₹10,000/month in a mutual fund, every month on a fixed date, ₹10,000 is debited from your account and used to purchase units of that fund at the current NAV. Over time, you accumulate units at different prices — averaging out your purchase cost. This is called Rupee Cost Averaging.
The SIP Formula (How Returns Are Calculated)
Example: ₹10,000/month for 15 years at 12% annual return:
Total invested: ₹18 lakh. Returns: ₹32 lakh. That's the power of compounding.
How Much SIP to Become a Crorepati?
| Monthly SIP | Duration | At 12% Return |
|---|---|---|
| ₹5,000 | 25 years | ₹94.88 lakh |
| ₹10,000 | 20 years | ₹98.93 lakh |
| ₹10,000 | 25 years | ₹1.89 Crore ✅ |
| ₹20,000 | 15 years | ₹1.00 Crore ✅ |
| ₹30,000 | 12 years | ₹1.00 Crore ✅ |
Step-Up SIP: The Game Changer
A regular SIP keeps your monthly investment fixed forever. A Step-Up SIP increases your investment by a fixed % every year — matching your salary growth. The difference is staggering:
| Strategy | Starting SIP | After 15 Years at 12% |
|---|---|---|
| Flat SIP | ₹10,000/month | ₹50 lakh |
| 10% Annual Step-Up | ₹10,000/month | ₹88 lakh (+76%) |
| 15% Annual Step-Up | ₹10,000/month | ₹1.18 Crore (+136%) |
Our Step-Up vs Flat SIP Comparison shows exactly how much extra wealth you build by increasing your SIP even 5% per year. Most people are shocked by the result.
Realistic SIP Returns in India
What return rate should you use in an SIP calculator? Here's a realistic guide based on historical performance:
| Fund Category | Conservative | Realistic | Optimistic |
|---|---|---|---|
| Large Cap MF | 10% | 12% | 14% |
| Flexi Cap MF | 11% | 13% | 16% |
| Mid Cap MF | 12% | 15% | 18% |
| Small Cap MF | 13% | 16% | 20%+ |
| Debt Fund | 6% | 7% | 8% |
| Hybrid Fund | 8% | 10% | 12% |
How to Use SIPKaro's SIP Calculator
- Go to sipkaro.in and open the SIP Calculator
- Enter your monthly SIP amount
- Set the investment duration (10, 15, 20 years)
- Enter expected annual return (use 12% for large cap)
- Optionally set annual step-up % (10% is a good default)
- See the year-by-year growth chart and total corpus instantly
Instead of guessing how much to invest, use our Goal-Based SIP Planner. Enter your target amount (e.g. ₹1 Crore), time horizon and expected return — it tells you the exact monthly SIP required to hit that goal.
SIP vs Lumpsum — Which is Better?
The honest answer: it depends on the market. In rising markets, lumpsum beats SIP because your full money compounds for longer. In volatile or declining markets, SIP wins because you buy more units at lower prices.
For salaried investors who don't have a large lumpsum to invest, SIP is the clear winner — it's disciplined, automatic, and removes the temptation to time the market.
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