SIP Returns Table: ₹500 to ₹50,000 a Month, 3 to 25 Years

A ₹500 SIP for 3 years puts in ₹18,000 and, at an assumed 12% a year, ends near ₹21,754. ₹5,000 a month for 10 years ends near ₹11,61,695. The table below has every amount from ₹500 to ₹50,000 and every length from 3 to 25 years, and the rest of the page covers what a table cannot: when 12% is the wrong number to plan with, and how tax changes with the amount.

The table: what a monthly SIP becomes at 12%

Each figure assumes the instalment goes in at the start of every month and the return is the same every month. Real months are not that tidy, so read it as a range, not a forecast. The value scales exactly with the amount, so ₹2,000 is four times the ₹500 row, and a ₹12,000 SIP is 1.2 times the ₹10,000 row.

What ₹500 a month becomes in 3 years

At 12% the pot is ₹6,405 after one year, ₹13,622 after two and ₹21,754 after three. The first two rows matter more than the last four, and the next section is why.

Why three years is an awkward length for equity

The 12% in most SIP calculators is an assumption, not a promise, and not a measured result for any particular three years. A fund can land above it or below it. A SIP only spreads your buying across the months. It can't change what the market does.

So the useful question is when you need the money.

If it's for something due in exactly three years, such as a course fee or a deposit on a flat, look at the 0% and -5% rows. A bank recurring deposit paying an assumed 6.5% would turn the same ₹500 a month into about ₹19,912. Check your own bank's rate. An RD can't finish below ₹18,000.

If the goal is 7 or 10 years away, the SIP is the right tool, because a flat or falling first three years just means the later instalments buy more units for the same ₹500. The gap between a good return and a poor one also grows with time, which is why length matters more than amount:

Over 3 years the best and worst of those rates are ₹20,676 apart. Over 25 years they are ₹88,49,556 apart.

And a view: ₹500 for 3 years is a habit, not a wealth plan. Even at 14% the gain is ₹4,471. What it proves is that you can run a monthly debit without skipping it, which is worth far more once the amount grows.

Raising it every year

Raise the SIP by 10% each year and you put in more and end higher. ₹500 for 3 years becomes ₹500, then ₹550, then ₹605: you invest ₹19,860 instead of ₹18,000 and, at 12%, end at ₹23,820, which is ₹2,067 more than the flat SIP. At ₹5,000 for 10 years the flat SIP ends at ₹11,61,695 and the stepped one at ₹16,87,163.

Tax barely applies at ₹500 and clearly applies at ₹10,000

Equity fund units held for more than 12 months are long-term. Gains above ₹1.25 lakh in a financial year are taxed at 12.5%, and short-term gains at 20%. Rates change in budgets, so confirm the current figures on the Income Tax Department's site before you redeem.

Every instalment has its own clock. Sell everything at the end and the last 12 instalments are still short-term, whatever the length of the SIP. At ₹500 for 3 years, the gain is ₹3,754, the short-term part is ₹405 and the tax is about ₹81 before cess. The ₹1.25 lakh limit is nowhere near.

At ₹10,000 for 10 years the gain is ₹11,23,391. The short-term part is ₹8,093, and the long-term part is ₹11,15,297, of which ₹1,25,000 is inside the yearly limit. The tax is about ₹1,25,406 before cess if everything is sold in one financial year. Selling in tranches across years is how people keep more of the gain inside the limit.

Picking a fund for a small SIP

Fund houses set their own minimum SIP, commonly ₹100 to ₹500, so ₹500 clears the bar at most. SEBI has also been nudging the industry toward ₹250 SIPs.

For a first SIP I'd take a Nifty 50 index fund in the Direct plan. Direct ratios on large Nifty 50 funds are reported at roughly 0.06% to 0.20%, against 0.4% to 0.8% for Regular plans in one comparison, which is a gap of a few tenths of a percent. The 1% figure you often see applies to active funds. Look up the factsheet for the exact ratio.

Frequently asked questions

What does a missed instalment cost?

Skipping the first ₹500 of a 3-year SIP costs about ₹715 of final value at 12%, because that ₹500 would have grown for all 36 months. Missing the last one costs about ₹505.

What is it worth in today's money?

At 6% inflation, ₹21,754 in three years buys what ₹18,265 buys today. Over 25 years the same ₹500 a month ends at ₹9,48,818, which buys what ₹2,21,073 buys today.

Is it better to start a SIP or put the money in a lump sum?

A lump sum gets the full return from day one, but it also takes the full risk of a bad entry. A SIP spreads that entry over many months. Compare both on the lumpsum calculator.

Your next step

Pick the day after your salary usually lands and set the debit for then. In a year, raise it by 10%. To test an amount, return or length that is not in the table, the free SIP calculator uses the same method as this page.

Sources

These are secondary sources; confirm tax rates on the Income Tax Department's site and fund costs on AMFI or the fund's factsheet before acting.

• Business Standard: SEBI nudges mutual funds to push bite-sized SIPs
• Kotak Neo: Section 112A, LTCG tax on mutual funds
• Aditya Birla Capital: long term capital gain on shares
• Business Standard: SEBI on separate disclosure of direct and regular plan expenses
• Bajaj AMC: direct vs regular Nifty index funds

The same maths, on your phone

Expense Tracker: Income Manager does the EMI, SIP and goal arithmetic in this article against your own numbers, and works in airplane mode. No account, no cloud sync.