Mutual Fund Calculator

Two ways in, two different formulas#

Switch the investment type above and the arithmetic underneath changes completely.

Lumpsum is straight compound interest — one amount, left alone:

M = P × (1 + r ÷ 100) ^ t

Monthly SIP is an annuity due, because each instalment compounds for a different length of time:

M = P × ([(1 + i)^n − 1] ÷ i) × (1 + i)

That difference is why the two are not comparable at the same "amount". ₹10,000 as a lumpsum is ₹10,000 of exposure; ₹10,000 a month for ten years is ₹12,00,000 of it.

Lumpsum against SIP on the same money#

Put ₹12,00,000 to work over ten years at 12%, two ways:

The lumpsum wins by a wide margin, and it always will in a rising market, because the whole sum is exposed for the whole period. That is not an argument for lumpsum investing. It is an argument for noticing that the comparison assumes you had ₹12 lakh on day one and that the market went up. Most people have a salary rather than a lump sum, and the SIP exists because averaging into a volatile asset is easier to hold through than a single large entry.

The number you should not trust#

Both figures assume a constant annual return. Real fund returns arrive as a sequence, and the sequence matters enormously for anyone withdrawing. Two funds averaging 12% over ten years — one that front-loads its gains, one that back-loads them — leave a SIP investor in very different places, because the SIP's later, larger instalments meet different markets.

Treat the output as a planning estimate with a wide error bar, not a projection.

What this does not include#

• Expense ratio and exit load — subtract roughly 0.2% a year for an index fund, or 1% to 1.8% for an active one, if your return assumption came from an index rather than a fund's own published return.
• Tax on redemption — equity gains above the annual exemption are taxed, with a lower rate once units have been held beyond a year. Debt funds follow slab rates.
• Step-up SIPs — the instalment is held flat here.

Questions#

What return should I assume?#

For diversified equity, somewhere between 10% and 12% is a defensible long-run planning number for India. For debt funds, use something near the prevailing yield — a debt fund cannot compound its way past the bonds it holds. For hybrid funds, blend the two by allocation. Whatever you pick, run the calculation at three percentage points either side and see whether your plan still works at the bottom of that range.

Why does my fund's app show a different figure?#

Fund apps compute XIRR on your actual transaction dates and prices, including every instalment that bounced, every dividend, and any switch you made. This calculator models a clean, regular schedule at a constant rate. The two answer different questions.

SIP or lumpsum for money I already have?#

The honest answer is that lumpsum wins on average and SIP wins on regret. If deploying the whole amount at once and watching it fall 20% would make you sell, spreading it over six to twelve months buys you the ability to stay invested — which is worth more than the average few percentage points it costs.