Calculation methodology and assumptions

The calculators model a constant rate of growth. Actual mutual fund returns fluctuate, and a real SIP buys units at different net asset values. These projections do not simulate market prices or predict a fund's performance.

Monthly SIP formula

FV = P × (((1 + i)^n − 1) / i) × (1 + i)

• P: monthly contribution, paid at the beginning of each month.
• i: annual rate entered as a percentage, divided by 100 and then by 12.
• n: duration in years multiplied by 12.

At zero return, the value is simply P × n. Beginning-of-month contributions receive one more month of growth than end-of-month contributions. Other calculators may use a different timing convention.

For ₹5,000 a month over 20 years at the illustrative 12% annual rate, total contributions are ₹12,00,000, projected gains are ₹37,95,740, and the projected value is ₹49,95,740.

Annual rates, CAGR, and XIRR

The SIP calculator uses the nominal monthly conversion r / 12. A 12% entry therefore means 1% per month, with an effective annual growth rate of about 12.68%. An effective annual rate of exactly 12% would instead use (1.12)^(1/12) − 1 per month and produce a different result. We do not label the calculator input as a measured CAGR or XIRR.

XIRR measures an annualized return from actual dated cash flows. A projection using a constant assumed return is not a calculation of your portfolio's historical XIRR.

Step-up SIP, lumpsum, and withdrawals

Step-up SIP contributions increase once after every twelve payments; each contribution then receives the same monthly growth assumption. The lumpsum calculator compounds a single deposit annually using P × (1 + r)^years. The SWP model applies monthly growth before deducting that month's withdrawal; it stops withdrawals when the balance runs out.

Inflation and tax illustrations

Inflation-adjusted value equals future value divided by (1 + annual inflation rate)^years. This expresses a future sum in today's purchasing power using the inflation assumption you choose.

The optional tax toggle applies your selected rate to positive projected gains above a fixed ₹1.25 lakh illustration threshold. It treats the modeled gain as a single pool. It does not track the holding period of each SIP installment, other gains using the annual exemption, short-term gains, fund classification, cess, surcharge, or future changes in law. It is not a redemption tax calculation.

Rounding and excluded costs

Values are calculated using unrounded intermediate numbers, then displayed to the nearest rupee. Return assumptions must account for any fund expenses you expect; the model does not separately deduct expense ratios, exit loads, transaction charges, or changes in returns. Tax is excluded unless you enable the optional illustration.

Sources and reproducibility

You can reproduce the monthly SIP result in a spreadsheet with =FV(12%/12,20*12,-5000,0,1). Compare the assumptions with the NISM SIP calculator explanation; payment timing can differ. Read AMFI's explanation of mutual fund risks before treating any return assumption as a plan.

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