SIP example
₹5,000 SIP for 10 years
Invested every month at a 12% average annual return, ₹5,000 for 10 years grows to about ₹11.62 lakh. You put in ₹6 lakh; the other ₹5.62 lakh is returns.
Result
₹11.62 L
Maturity value after 10 years
- Total invested
- ₹6 L
- Returns earned
- ₹5.62 L
- In today's money (6% inflation)
- ₹6.49 L
- With a 10% yearly step-up
- ₹16.87 L
Your money grows 1.9 times.
Starting five years later and stopping at the same time leaves about ₹4.12 lakh, ₹7.49 lakh less.
₹5,000 a month for 10 years at different returns
| Annual return | Invested | Returns | Maturity value |
|---|---|---|---|
| 8% | ₹6 L | ₹3.21 L | ₹9.21 L |
| 10% | ₹6 L | ₹4.33 L | ₹10.33 L |
| 12% | ₹6 L | ₹5.62 L | ₹11.62 L |
| 14% | ₹6 L | ₹7.10 L | ₹13.10 L |
Long-run returns from diversified equity funds have often fallen in this range, but no return is guaranteed and a single year can be far outside it.
Year by year at 12%
| Year | Invested so far | Value | Gain |
|---|---|---|---|
| 1 | ₹60,000 | ₹64,047 | ₹4,047 |
| 2 | ₹1.20 L | ₹1.36 L | ₹16,216 |
| 3 | ₹1.80 L | ₹2.18 L | ₹37,538 |
| 4 | ₹2.40 L | ₹3.09 L | ₹69,174 |
| 5 | ₹3 L | ₹4.12 L | ₹1.12 L |
| 6 | ₹3.60 L | ₹5.29 L | ₹1.69 L |
| 7 | ₹4.20 L | ₹6.60 L | ₹2.40 L |
| 8 | ₹4.80 L | ₹8.08 L | ₹3.28 L |
| 9 | ₹5.40 L | ₹9.74 L | ₹4.34 L |
| 10 | ₹6 L | ₹11.62 L | ₹5.62 L |
How this is worked out
A SIP is a series of equal monthly instalments, each compounding for the time it stays invested. The first ₹5,000 compounds for 120 months, the last for one. The maturity value is the sum of all 120 instalments with their growth, which is the future value of an annuity: M = P × ((1 + i)^n − 1) / i × (1 + i).
Here P is ₹5,000, i is the monthly rate (12% ÷ 12 = 1% a month) and n is 120 months. Each instalment is assumed to go in at the start of the month, as most SIP dates do, which is what the (1 + i) at the end accounts for.
The 12% is an assumption, not a promise. Equity fund returns arrive unevenly, so the real path will zigzag even if the average lands here. The table above shows how much the answer moves with the rate: at 10% the same SIP ends near ₹10.33 lakh, at 14% near ₹13.1 lakh.
Inflation matters as much as return over 10 years. At 6% a year, ₹11.62 lakh then buys roughly what ₹6.49 lakh buys today. Raising the SIP by 10% each year, in step with your salary, lifts the final figure to about ₹16.87 lakh for a total outlay of ₹9.56 lakh.
Frequently asked questions
Results are estimates for education and planning, not financial advice.
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