Are you planning to start a ₹85,000 SIP? Understanding the potential maturity value is key to successful long-term investing. With a monthly investment of ₹85,000 in mutual funds for 5 years, your estimated wealth creation would be ₹70.11 Lakh. This SIP calculation accounts for the compounding effect, turning your total savings of ₹51,00,000 into a substantial retirement corpus of ₹70.11 Lakh in 2026.
Are you planning to start a ₹85,000 SIP? Understanding the potential maturity value is key to successful long-term investing. With a monthly investment of ₹85,000 in mutual funds for 5 years, your estimated wealth creation would be ₹70.11 Lakh. This SIP calculation accounts for the compounding effect, turning your total savings of ₹51,00,000 into a substantial retirement corpus of ₹70.11 Lakh in 2026.
How Does the SIP Calculator Work?
The SIP calculator uses the future value of annuity formula below. A key point: the monthly rate must be calculated geometrically, not by simply dividing the annual rate by 12. For example, a 12% annual return is NOT 1%/month — the correct monthly rate is (1+0.12)^(1/12) - 1 = 0.9489%/month. Using 1%/month inflates results and is incorrect.
M = P × ({[1 + i]^n – 1} / i) × (1 + i)Where:
- • M = Maturity amount (future value)
- • P = Monthly SIP amount
- • i = Monthly rate = (1 + Annual Rate/100)^(1/12) – 1
- • n = Total months = Years × 12
- • Example: 12% annual → i = (1.12)^(1/12) – 1 = 0.9489% per month
- Rupee Cost Averaging: When NAV is low, your fixed SIP buys more units. When NAV is high, it buys fewer. Over time, this averages your cost and reduces timing risk.
- Power of Compounding: Returns earned each year themselves earn returns in subsequent years — this is why long tenures dramatically multiply wealth.
- Flexibility: Unlike FDs, you can pause, increase, or stop SIPs anytime without penalty (subject to exit load if within 1 year for equity funds).
- Tax Efficiency: Equity mutual fund SIPs held over 1 year attract only 12.5% LTCG tax on gains above ₹1.25 lakh — far lower than FD interest taxed at your income slab.
Example: ₹10,000/month SIP for 15 Years
Amit, a 28-year-old software engineer, starts a SIP of ₹10,000 per month in a large-cap equity mutual fund expecting 12% p.a. returns.
• Total Invested: ₹18,00,000 (over 15 years)
• Returns Earned: ₹32,45,760
• Total Corpus: ₹50,45,760
Amt's money nearly tripled — he earned ₹32 lakh on ₹18 lakh invested, purely through compounding.
What if he had put the same ₹18L in a Bank FD at 7%? → Maturity: ~₹37 lakh. SIP wins by ₹13+ lakh.
Monthly SIP: ₹10,000
Duration: 15 years
Expected Return: 12% p.a.
Total Corpus: ₹50,45,760
SIP vs Lumpsum vs Bank FD: Which is Better?
Comparing ₹12 lakh invested over 10 years across three options (12% for equity, 7% for FD):
| Parameter | SIP (₹10K/mo) | Lumpsum (₹12L) | Bank FD (₹12L) |
|---|---|---|---|
| Total Investment | ₹12,00,000 | ₹12,00,000 | ₹12,00,000 |
| Maturity Value | ₹23,23,391 | ₹37,27,020 | ₹23,61,624 |
| Risk Level | Medium (Market) | High (Timing) | Zero |
| Tax on Gains | 12.5% LTCG (above ₹1.25L) | 12.5% LTCG | As per income slab |
| Timing Risk | Low (Rupee Avg) | High | None |
Frequently Asked Questions
⚠️ Disclaimer
The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.