SIP Calculator with Inflation Adjustment

This calculator applies the same return every month for the whole period. No equity fund has ever done that. What it produces is not a forecast — it is the answer to a narrower question: if returns averaged exactly this much, and arrived perfectly evenly, here is what the arithmetic gives.

That distinction matters more than it sounds, because the order in which returns arrive changes the result even when the average is identical. Here are two ten-year sequences for a ₹5,000 monthly SIP. Both average 8.8% a year. Both contain exactly the same ten annual returns, only reversed.

Twice the money, from the same average return. The reason is that an SIP has very little invested in year one and the most invested in year ten, so late returns act on a far larger balance. Good years early apply to almost nothing; bad years early are cheap. This is sequence risk, and it runs the opposite way for someone drawing money down in retirement, where an early crash is the dangerous one.

The practical read: a single figure from any SIP calculator, including this one, is the midpoint of a wide range and not a promise. Treat it as a planning benchmark you revisit, not a number to build a commitment around.

At the defaults — ₹5,000 a month, 12%, 10 years — this tool returns ₹11.62 lakh against ₹6 lakh invested. That figure is in rupees of the year 2036. At 6% inflation it buys what ₹6.49 lakh buys today. Inflation quietly takes ₹5.13 lakh of the headline, which is more than the entire ₹5.62 lakh gain the calculator is celebrating.

This is why goals set in today's prices go wrong. A ₹25 lakh corpus for a child's education sounds like it covers a course that costs ₹25 lakh now. Fifteen years out, at 6%, it covers roughly ₹10.4 lakh of it. The tool above now shows the deflated figure alongside the nominal one, and the year-wise table carries a today's-money column, so you can compare a goal against the number that actually answers it.

One arithmetic caution. It is tempting to handle inflation by entering a "real" return of 12% − 6% = 6% instead. That understates the erosion: it gives ₹8.08 lakh where the correct answer is ₹6.49 lakh. Inflation compounds against your whole balance, not just the return, so the right operation is to deflate the final figure — which is what the field above does.

Step-up SIPs get described as though the increase is close to free. It is not — it is mostly you contributing more money. Over 20 years at 12%:

The corpus roughly doubles, which is real. But you put in ₹22.37 lakh more to get ₹49.49 lakh more — a multiple of 2.21×, noticeably worse than the 4.16× the flat SIP achieves on its ₹12 lakh. That is expected, not a flaw: step-up money arrives later, so it compounds for fewer years. A 10% step-up also means your monthly outgo in year 20 is ₹30,600, not ₹5,000. Check that against a realistic income path before assuming you will sustain it.

The honest case for a step-up is not returns, it is that a flat SIP shrinks in real terms every year. ₹5,000 a month in 2026 is ₹2,790 of purchasing power by 2036 at 6%. Stepping up roughly in line with inflation keeps your contribution constant in real terms rather than growing it.

The 12% default is a convention, not a finding. It is roughly in line with long-run Indian equity index returns, but any specific decade can land well above or below it, and the shorter your horizon the less an average means. Three habits help:

• Run the number twice — once at your expected rate and once four or five points lower — and check whether the goal still works in the pessimistic case. If it only works at 12%, it is not a plan.
• Use a lower figure for shorter horizons. Over five years, equity has a realistic chance of finishing negative; over twenty, much less so.
• Never take a fund's trailing three-year return as your input. Trailing returns are highest right after a strong run, which is exactly when the next few years tend to disappoint.

If you are comparing this against a fixed-return instrument, the EMI calculator works through the reducing-balance arithmetic on the borrowing side — worth a look if you are weighing whether to invest a surplus or prepay a loan with it.

Nothing here is investment advice, and this tool is not a substitute for a scheme document. Mutual fund investments carry market risk; the value can fall as well as rise, and past returns do not indicate future ones. Your inputs stay in your browser and are not sent to ToolMintX.