A guy at work got a 3,000 raise and the first thing he said was I will start a SIP. Ten years, retirement ki shuruaat, he said it like the corpus was already in the bank. I asked him what return he is assuming. He said 12, everyone says 12.
Everyone says 12. Markets dont sign that. I still ran 12, and I ran 8 and 10 and 14, on the SIP Calculator. Same 3,000. Same 10 years. Four different endings. That is the only honest way I know to talk about this.
Corpus is a range. Not a promise. Not a FD maturity.
Monthly SIP, assumed return, duration
Monthly SIP is 3000. What you can actually keep doing. Not what you will do if the market is fun in January.
Assumed yearly return is a guess. The label on this site says Assumed. I like that word. Default is 12. I treat 10 to 12 as a common planning band, not a fact. Expense ratio is not deducted. If you want to be conservative, drop this box by 1.
Duration is years. 10. Not 120. This page wants years. EMI wants months. RD wants months. I know. I still mix them when I am tired.
Hit Calculate. Estimated corpus, Invested, Estimated gain, Months.
Invested is the easy one. 3,000 times 120 is ₹3,60,000. You put that in. The rest is market luck.
This is an estimate, not an official figure.
No step-up SIP in this version. If you will raise 3,000 to 4,000 after two years, run twice in your head and add. Lumpsum plus SIP, use the compound interest tool for the lumpsum and add it yourself.
12 percent is a guess, here is the 10 year sheet
3,000 a month, 10 years.
At 8 percent assumed, corpus about ₹5,52,497. Gain about ₹1,92,497.
At 10 percent, corpus about ₹6,19,656. Gain about ₹2,59,656.
At 12 percent, corpus about ₹6,97,017. Gain about ₹3,37,017.
At 14 percent, corpus about ₹7,86,274. Gain about ₹4,26,274.
Same 3.60 lakh invested. Endings from about 5.5 lakh to about 7.9 lakh. That spread is why I refuse to say you will have 7 lakh. I say you might land somewhere in a band if you dont stop, and the band moves with return.
12 percent is the number people screenshot. ₹6,97,017 looks neat. A ugly five year patch in the middle can make the real 10 year number sit closer to the 8 or 10 line. Or a good decade can sit near 14. I dont know which decade you get.
Is 12 percent SIP return a safe assumption is the longer argument. Short version, no, 12 is not safe. It is a planning stub.
Five years at 12 percent, same 3,000. Invested ₹1,80,000. Corpus about ₹2,47,459. Gain about ₹67,459. People start a SIP, check at year 3, feel cheated, stop. Compounding is back-loaded. Ten years is a different animal from three.
Fifteen years at 12 percent. Invested ₹5,40,000. Corpus about ₹15,13,728. Gain about ₹9,73,728. That is the slide that sells SIPs. It is still a assumed 12. At 8 percent for 15 years, corpus about ₹10,45,035. The extra five years help. They dont guarantee 12.
You put in 3.60 lakh, the market does the rest
I keep repeating invested versus corpus because WhatsApp posts only show corpus. 7 lakh sounds like the SIP created 7 lakh. You created 3.60. Market created a maybe.
Compare with a RD of a similar monthly amount. RD of 5,000 a month for 3 years is a shorter habit and a known-ish rate. 3,000 SIP for 10 years is longer and unknown. I use RD for a near goal. I use SIP for a far goal I can stand to see red.
FD is a lumpsum cousin. FD of 2 lakh for 5 years if you have a chunk, not a monthly. Dont put 3000 in the FD deposit box and 10 in years and think that is a SIP.
If interest versus compound still mixes in your head, simple interest and compound interest is the clean 1 lakh demo. SIP math is compound on monthly puts. Same family, different tool.
Pausing SIP when EMI gets tight is the real risk on a 40k salary. Eligibility can show you have spare EMI, then a rate hike eats it, then the SIP is the first thing you kill. Dead SIP at year 4 never becomes the 6.97 lakh screenshot. I would rather they start 2,000 they can keep, than 5,000 they pause. Type 2000 and 4000 in Monthly SIP and see both corpus numbers. Pick the one that survives a bad year.
Dont compare one year fund return with this 10 year formula. One year can be minus 10. The box assumes a smooth yearly rate. Markets are not smooth. The formula is a straight line in disguise.
What I tell him after the raise
3,000 is a good start if the rest of the month already works. If he has a personal loan EMI of 6,800, I ask him to run eligibility leftover first. SIP is not an EMI but it is cash. I already have an EMI, how much extra loan is safe if the raise is about to become a new loan plus a SIP. Usually one of those should wait.
I also tell him to write 8 percent corpus on the same paper as 12. ₹5,52,497 and ₹6,97,017. If he can only be happy with 7 lakh, he will be unhappy in a average decade. If he can live with 5.5 and be pleasantly surprised at 7, he will stay invested. Staying is the whole product.
Tax on equity SIP gains is a separate headache. This box does not do tax. I dont invent a slab story here.
Fund choice, I am not your advisor. The calculator does not know a index fund from a flashy name. Lower assumed return is one way to respect expense ratios. Drop 12 to 11 in the box. Corpus will fall a bit. That fall is more honest than a brochure.
Three boxes, then stop dreaming in one number
Monthly SIP 3000.
Assumed yearly return 12, then 10, then 8.
Duration 10.
Write all three Estimated corpus lines. Invested stays ₹3,60,000.
Dont treat 12 as locked. Dont put 120 in Duration. Dont mix this with a bank RD rate.
If he skips year 4 and year 5 because a EMI jumped, the 10 year formula is no longer his life. I tell him to treat a pause as a new SIP later, and run Duration as the years he actually stayed. Honesty in the years box is more useful than a pretty 12 percent.
My colleague still says 7 lakh in 10 years when he talks. I say about 5.5 to 7.9 if you dont stop, and 3.60 is yours either way. He rolls his eyes. He still filled the boxes. That is enough for a lunch break.