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What is a SIP? — Systematic Investment Plan Explained

A beginner-friendly explanation of how SIP works in India, why it beats lump sum for most investors, and how to start a SIP with as little as ₹500/month.

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How SIP Works

A Systematic Investment Plan (SIP) lets you invest a fixed amount every month. Your money automatically buys more units when markets are low and fewer when high. This is rupee cost averaging, and it removes the need to time the market.

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Power of Compounding

A monthly SIP of ₹5,000 at 12% annual return for 20 years grows to over ₹49.9 lakh. The longer you stay invested, the harder compounding works.

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SIP for Beginners India

You can start a SIP with as little as ₹500 per month. Choose a SEBI-registered mutual fund. Use our free SIP calculator to find the right monthly amount for your goal.

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SIP Returns at a Glance — ₹5,000/month at 12% CAGR

Duration Amount Invested Estimated Returns Total Value
5 Years ₹3,00,000 ₹1,12,432 ₹4,12,432
10 Years ₹6,00,000 ₹5,61,695 ₹11,61,695
15 Years ₹9,00,000 ₹16,22,880 ₹25,22,880
20 Years ₹12,00,000 ₹37,95,740 ₹49,95,740
25 Years ₹15,00,000 ₹89,74,600 ₹1,04,74,600
* Indicative estimates only. Actual mutual fund returns vary. Not financial advice. Calculate your exact SIP →

Written & Reviewed by Finance Professionals

All SIP calculators, EMI tools, and investment guides on HelpForFinance are reviewed by experienced banking and lending professionals for accuracy.

Gaurav Dhameliya — Loans & Finance Expert at HelpForFinance
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Investment Disclaimer: All SIP calculators and investment guides on HelpForFinance are for informational and educational purposes only. Results are indicative estimates and do not constitute financial advice. Mutual fund investments are subject to market risks.

Frequently Asked Questions About SIP in India

What is the minimum SIP amount in India?
You can start a SIP with as little as ₹100–₹500 per month in most mutual funds. Popular fund houses like SBI, HDFC, ICICI Prudential, and Nippon India allow SIPs starting at ₹500/month. There is no maximum limit — you can invest any amount.
How much SIP do I need to accumulate ₹1 crore?
To build ₹1 crore, you need to invest approximately ₹5,500–₹6,000 per month for 20 years at an assumed 12% annual return, or ₹14,000–₹15,000 per month for 15 years. Use our free SIP calculator to find the exact monthly amount for your goal and timeline.
Is SIP better than FD (Fixed Deposit) in India?
SIP in equity mutual funds has historically delivered 10–14% CAGR over long periods, compared to 6–7% for FDs. However, SIP in mutual funds carries market risk while FDs offer guaranteed returns. For goals 5+ years away, SIP is generally more wealth-creating. For short-term goals (under 3 years), FDs may be safer.
What is the 15x15x15 rule in SIP?
The 15×15×15 rule means: invest ₹15,000 per month for 15 years at an expected 15% annual return — and you will accumulate approximately ₹1 crore. It's a popular rule of thumb to illustrate the power of SIP compounding over time. Use our monthly SIP calculator to verify this for your own numbers.
Can I stop my SIP anytime?
Yes. SIPs are flexible — you can pause, reduce, increase, or stop your SIP at any time without penalty. Simply log in to your mutual fund platform or AMC website and submit a SIP cancellation request. Your existing units remain invested until you choose to redeem them.
What is Step-Up SIP?
A Step-Up SIP (also called Top-Up SIP) lets you automatically increase your SIP amount by a fixed percentage (e.g. 10%) every year. This aligns with your salary growth. A ₹5,000/month SIP with a 10% annual step-up at 12% returns can build ₹1.06 crore in 20 years vs ₹49.9 lakh for a flat SIP — almost double. Use our Step-Up SIP Calculator to see the difference.

How Much Will Your ₹5,000/Month SIP Be Worth in 20 Years?

Enter your monthly SIP amount into our free calculator and see how compound interest transforms your savings into wealth.

₹5,000/month × 20 years × 12% CAGR = ₹49.9 lakh 🚀

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