Is 12% a realistic SIP return?

It is a reasonable planning assumption for a diversified equity fund held ten years or more, roughly what the Nifty 50 has averaged with dividends over long stretches. It is not a promise, and over any single five-year window the actual figure has ranged from low single digits to over 20%. Run the calculator at 10% too and plan around that number.

What does a step-up SIP do to the maturity value?

It raises the instalment by a fixed percentage every year, usually matched to your increment. ₹5,000 a month for 15 years at 12% reaches ₹25,22,880; the same SIP stepped up 10% a year reaches ₹43,41,925. The catch is the final instalment, ₹20,886 a month by year fifteen, so check that against where your salary will actually be.

Why does this SIP calculator show more than the one on my app?

Because a SIP instalment is invested at the start of the month, so every instalment earns one extra month. This calculator uses that annuity-due formula, which is what fund houses use. Calculators that treat the SIP as paid at month end show about ₹25,000 less on the default example.

Which SIP date is best, and does the 7th matter?

No date has any measurable edge over 15 years, so the popular 5th, 7th or 10th is fine. What matters is that the NACH mandate does not bounce, so pick a date a few days after your salary reliably lands. A bounced SIP costs a bank mandate return charge, and most AMCs cancel the SIP after three consecutive failures.

How is SIP income taxed when I redeem?

Each instalment is a separate purchase. For equity funds in FY 2025-26, units held over 12 months are long-term and taxed at 12.5% after the first ₹1.25 lakh of gains in the year, which is exempt; units held 12 months or less are taxed at 20%. Debt funds bought after 1 April 2023 are taxed at your slab rate however long you hold them.

Does the expense ratio really change the result?

Yes, and by more than the number suggests because it compounds. A 1% higher expense ratio, roughly the gap between a regular plan and a direct plan on Groww, Zerodha Coin or Kuvera, turns ₹25,22,880 into ₹22,94,288 on the default example. Enter a return net of the expense ratio, and buy direct plans.

SIP Calculator: Mutual Fund Returns with Step-Up

Inputs, and why 12% is an assumption

Four boxes. The monthly SIP is what leaves your bank account on the SIP date. The investment period is in years; the calculator turns it into monthly instalments. The step-up, if you use it, is the percentage the instalment rises by every twelve months.

The expected return is the one to think about. 12% is the number every app on Groww or Zerodha Coin pre-fills, and it is roughly what the Nifty 50 has averaged over long stretches with dividends reinvested. It is not what your fund will return. Over any particular five-year window an index fund has done anywhere from low single digits to over 20% a year, and a mid-cap or small-cap fund swings far wider. Treat 12% as a working assumption for a plan, run 10% as well, and if the plan only works at 14% it is not a plan.

The rate you enter should also be net of the expense ratio (more on that below). A regular plan bought through a distributor charges 1.5 to 2% a year on an equity fund; the direct plan of the same fund on Kuvera or Coin charges 0.5 to 1%. That gap comes straight off the return.

The formula, with the ₹5,000 a month example

A SIP instalment goes in at the start of the month and earns for that month, so the right formula is the annuity-due one, not the ordinary annuity most textbook examples use:

FV = P × [((1 + i)^n - 1) / i] × (1 + i)

P is the monthly instalment
i is the monthly rate, the annual return divided by 12 (12% gives 0.01)
n is the number of instalments (15 years gives 180)

The trailing (1 + i) is the whole difference between this calculator and the ones that leave it out. On the default inputs it is worth ₹24,979, one extra month of growth on the whole pile. The calculator actually does the sum month by month rather than with the closed form, because that is the only sane way to handle a step-up.

₹5,000 a month, 12%, 15 years, no step-up


Total invested	₹9,00,000
Maturity value	₹25,22,880
Returns earned	₹16,22,880
Total return	180.3%

Returns are nearly twice what you put in, and the timing of them is the part people underestimate. Stop the same SIP at 10 years and the maturity value is ₹11,61,695, with ₹5,61,695 of returns. So of the ₹16.2 lakh of returns at year 15, about ₹10.6 lakh, two-thirds, arrives in the last five years. Stopping a SIP at year eight because it “has not done much” is stopping just before it does.

The same SIP with a 10% step-up

Raise the instalment by 10% on every anniversary, matching a typical increment:

	Flat	10% step-up each year
Total invested	₹9,00,000	₹19,06,349
Maturity value	₹25,22,880	₹43,41,925
Returns earned	₹16,22,880	₹24,35,576
Final monthly SIP	₹5,000	₹20,886

The final instalment is the number to look at before setting this up. A 10% step-up compounds like everything else, and by year fifteen the SIP is ₹20,886 a month, four times where it started. If your salary will not have quadrupled, use a 5% step-up or plan to stop stepping after some years. Most AMCs let you set a cap on the step-up amount when you register the mandate.

Expense ratio, the SIP date and the 7th-of-month habit

Three things that are not in the formula but change the result.

Expense ratio. It is deducted daily from the NAV, so you never see it as a debit, which is why people ignore it. Put 11% into the calculator instead of 12% (a 1% higher expense ratio, roughly the regular-versus-direct gap) and the same ₹5,000 for 15 years reaches ₹22,94,288 instead of ₹25,22,880. That is ₹2,28,592 paid for the privilege of a distributor’s phone number. Direct plans on Groww, Zerodha Coin, Kuvera or the AMC’s own site charge nothing extra.

The SIP date. Nearly everyone picks the 5th, 7th or 10th, because salary lands on the 1st and rent goes out on the 2nd. The 7th-of-month habit is fine. The date makes no measurable difference to returns over 15 years, and anyone selling you a “best SIP date” study is selling something. What the date does affect is whether the NACH mandate bounces. Pick a date a few days after your salary reliably arrives, not the day it is due.

Missed instalments. A bounced SIP is not a penalty from the fund house, but the bank charges a mandate return fee, a few hundred rupees plus GST at most large banks (the schedule of charges has the exact figure), and most AMCs cancel the SIP after three consecutive failures. If cash is going to be tight, pause the SIP through the app rather than letting it fail.

What the tax office takes when you redeem

Every instalment is a separate purchase with its own date, so redeeming a 15-year SIP means selling 180 lots, each with its own holding period.

For equity funds in FY 2025-26, units held more than 12 months are long-term: the gain is taxed at 12.5%, after the first ₹1.25 lakh of long-term equity gains in the year, which is exempt. Units held 12 months or less are short-term and taxed at 20%. Redeem the whole default SIP in one go and roughly the last twelve instalments are short-term, the rest long-term, with a slice of the long-term gain sheltered by the ₹1.25 lakh exemption.

Debt funds bought after 1 April 2023 are taxed at your slab rate however long you hold them. Hybrid funds depend on their equity share; check the scheme’s category before assuming.

Two practical points. The platform’s capital gains statement (Groww, Coin and Kuvera all generate one, and CAMS or KFintech will produce one across every AMC at once) is what goes into the ITR, and it should match your AIS. And if you are holding for the long term anyway, redeeming ₹1.25 lakh of gains every March instead of everything at the end uses the exemption fifteen times rather than once.

Where an FD, RD or PPF fits better

Equity for a goal under five years is a mistake in both directions: you can lose money you needed, and you cannot use the volatility that makes SIPs work over long periods. School fees due in 2028 belong in an RD or an FD, where the return is lower but known. For a 15-year horizon with zero risk and a tax-free result, the PPF calculator shows what 7.1% does to ₹1.5 lakh a year. To check what an existing SIP has actually returned rather than what a new one might, the ROI calculator works from your invested and current values. And to see what a “12% guaranteed” pitch on a lump sum actually implies, the compound interest calculator does that sum properly.

SIP Calculator