Mutual Fund Calculator

One fund, two ways of buying it

₹5,000 a month for ten years at 12% grows to ₹11,61,695 against ₹6,00,000 invested. The same ₹6,00,000 placed as a single lumpsum on day one at the same rate becomes ₹18,63,509. Same fund, same return, same money — a difference of over ₹7 lakh, produced entirely by how long each rupee was invested.

That comparison is the reason this calculator offers both modes, and it is routinely misread. The lumpsum figure is larger because all the money compounded for the full ten years, while SIP instalments averaged roughly five years each. It does not mean lumpsum investing is better — it means the comparison is unfair unless you actually have ₹6 lakh today. For someone saving from a salary, the SIP figure is the only one that describes reality.

How each mode computes

SIP uses the future value of an annuity-due, summing each instalment compounded for the months it remains invested:

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

where i is the monthly rate and n the number of instalments.

Lumpsum is straightforward compound growth:

M = P × (1 + r)ᵗ

Both assume a steady annual return, which no equity fund delivers. Real funds move in an irregular sequence that averages out only across long periods.

What return to enter

This is the input that dominates the answer, and where most projections go wrong. Reasonable long-run assumptions, net of expense ratio:

• Large-cap and index funds: 10–12%
• Flexi-cap and mid-cap: 11–14%, with materially higher volatility
• Debt funds: 6–8%
• Hybrid and balanced advantage: 8–11%

Entering a fund's trailing three-year return is the classic error, because that period may have been an unusual bull run. Use a long-run figure and re-run the projection two points lower to see your downside.

Critically, the rate you enter should be net of the expense ratio. A fund charging 1.2% against an index returning 12% delivers about 10.8% to you, and over twenty years that 1.2% removes roughly a fifth of the final corpus — because the fee compounds against you exactly as returns compound for you. This is the entire arithmetic case for index funds, whose expense ratios are often below 0.2%.

Reading the result

The maturity value is pre-tax and pre-inflation. Equity fund gains held beyond twelve months are taxed at 12.5% above a ₹1.25 lakh annual exemption; below twelve months, 20%. Debt funds bought on or after 1 April 2023 are taxed at your slab rate regardless of holding period.

For inflation, a rough correction: at 6%, ₹11.6 lakh in ten years buys roughly what ₹6.5 lakh buys today. Still a real gain on ₹6 lakh invested, but a far more modest one than the headline.

The invested versus returns split is the more instructive reading. Early in any SIP, your own contributions dominate — the crossover where returns exceed contributions typically arrives around year eight to ten at a 12% assumption. Investors who conclude the method does not work at year four are quitting immediately before it starts to.

Common mistakes

Comparing SIP and lumpsum figures directly. They deploy money on completely different schedules.

Using a recent return as the assumption. Three good years are not a forecast.

Ignoring the expense ratio. A 1% difference is not 1% — over twenty years it is roughly a sixth of your corpus.

Assuming direct and regular plans are the same fund. They hold identical portfolios, but regular plans embed a distributor commission in the expense ratio, typically costing 0.5–1% a year. Over long horizons, choosing direct is among the easiest genuine improvements available.

Treating the projection as a plan. It is arithmetic applied to an assumption you supplied. Plan against the lower end of a range, not the headline.