SIP returns explained: what ₹5,000 a month becomes
Most SIP calculators give one big number and stop. This guide shows how that number is built, how it changes with time, the amount and the return you assume, and what it leaves out, using ₹5,000 a month as the running example. Updated 22 October 2026.
What a SIP does
A SIP, a systematic investment plan, puts a fixed amount into a fund on the same date every month. Because the amount is fixed, a month when the price is low buys more units and a month when it is high buys fewer. Over the years that spreads your purchases across the ups and downs instead of betting everything on one day.
The rest of this guide is arithmetic: what a monthly amount grows to if it earns a steady return. The return in every table below is an assumption chosen to show how the sums behave. It is not a forecast, and no fund promises it.
The formula behind the answer
For a monthly amount P, a monthly rate i (the annual rate divided by 12) and n months, the value at the end is P × (1 + i) × [((1 + i)n − 1) ÷ i]. The extra (1 + i) is there because an instalment paid at the start of a month earns for that whole month. Every figure on this page uses that formula.
What ₹5,000 a month becomes
Here is the same ₹5,000 a month at two assumed returns, for different lengths of time (a lakh is 1,00,000 and a crore is 100 lakh):
| Years | You put in | At 10% a year | At 12% a year |
|---|---|---|---|
| 10 | ₹6 lakh | ₹10.33 lakh | ₹11.62 lakh |
| 15 | ₹9 lakh | ₹20.90 lakh | ₹25.23 lakh |
| 20 | ₹12 lakh | ₹38.28 lakh | ₹49.96 lakh |
| 25 | ₹15 lakh | ₹66.89 lakh | ₹94.88 lakh |
| 30 | ₹18 lakh | ₹1.14 crore | ₹1.76 crore |
Notice how the gap between what you put in and what you get back widens as the years pass. After 10 years at 12% the growth is about ₹5.6 lakh on ₹6 lakh invested. After 30 years it is about ₹1.58 crore on ₹18 lakh.
Time matters more than the amount
Compare 20 years with 30 years of the same ₹5,000 at 12%. The 30-year plan puts in only 1.5 times as much money (18 lakh against 12 lakh), yet it ends about 3.5 times higher: ₹1.76 crore against ₹49.96 lakh. The extra ten years add about ₹1.27 crore, on just ₹6 lakh of extra instalments.
That is the practical meaning of compounding. The growth earned in the early years is itself invested, and it keeps earning for the rest of the time. Money that starts later has fewer years to do that.
What a yearly step-up adds
A step-up SIP raises the monthly amount by a fixed percentage each year, usually in line with a rising salary. Take ₹5,000 a month for 10 years at 12%. With no step-up it becomes ₹11.62 lakh on ₹6 lakh invested. Raise the amount by 10% every year and it becomes about ₹16.87 lakh, but you also put in about ₹9.56 lakh.
A step-up is not free money. You are investing more, and the larger result partly reflects that. What it does is keep your investing in step with your income, so the habit does not shrink in real terms.
Working backwards from a target
You can turn the formula around to ask how much a month it takes to reach a number. To reach ₹1 crore at an assumed 12%:
- in 20 years you would need about ₹10,009 a month;
- in 30 years you would need about ₹2,833 a month.
The same target costs less than a third as much per month when you have ten more years. It is the same effect as in the last section, seen from the other side.
A crore later is not a crore today
Prices rise, so a rupee in 20 years buys less than a rupee now. If prices rise by 6% a year, ₹1 crore after 20 years buys what about ₹31.2 lakh buys today. When you set a target, ask what it will be worth in today’s money, not just how large the number looks.
How much the assumed return matters
The return is the figure you control least and the one the result is most sensitive to. For ₹5,000 a month over 10 years:
| Assumed return | Value after 10 years |
|---|---|
| 8% a year | ₹9.21 lakh |
| 12% a year | ₹11.62 lakh |
| 15% a year | ₹13.93 lakh |
A few points of difference in the assumed return move the answer by lakhs. That is why a sensible plan is tried at more than one return, including a low one.
What these figures leave out
- Steady returns. The sums assume the same return every month. Real markets rise and fall, and the order of good and bad years changes the outcome even when the average is the same.
- Costs. A fund charges an expense ratio, may charge an exit load if you withdraw early, and the gains are taxed when you sell. Your real result will be lower than the table.
- Guarantees. Market-linked investments can lose money. Nothing in this guide says a fund will earn any particular return.
This guide is arithmetic and general education, not advice for your situation. For a decision about real money, speak to a registered adviser.
Try your own numbers
The SIP Calculator works out the value for any monthly amount, return, number of years and yearly step-up, and shows the year-by-year table behind the answer. It runs in your browser, so nothing you type is uploaded.