How much will a monthly investment grow to? (SIP returns explained)
What 5,000 a month becomes after 5, 10, 15 and 20 years at 12%, why the later years add most of the growth, and what these projections can and cannot promise.
Published
Tools for this job: Compound Interest Calculator · Percentage Calculator
Investing a fixed amount every month, called a systematic investment plan or SIP in India and a regular savings plan or monthly contribution elsewhere, is how most people build savings. The question everyone asks is the same: if I put in this much each month, what will I have?
5,000 a month at 12% a year
| Years | You put in | Projected value |
|---|---|---|
| 5 | 3,00,000 | 4,12,432 |
| 10 | 6,00,000 | 11,61,695 |
| 15 | 9,00,000 | 25,22,880 |
| 20 | 12,00,000 | 49,95,740 |
These figures assume 1% growth each month (12% a year divided by 12), with each payment made at the start of the month, which is how most SIP calculators work. With payments at the end of each month, every figure is about 1% lower.
The later years do the heavy lifting
Look at the gaps. Over the first ten years, the investment grows to 11.6 lakh. Over the next ten, with exactly the same monthly amount, it grows by another 38 lakh. That is compounding: growth on earlier growth. It is also why stopping a plan for a few years in the middle costs much more than the payments you skipped.
Run your own projection
- Open the Compound Interest Calculator.
- Set the starting balance to 0, or to what you already have invested.
- Enter your monthly amount as the regular contribution, and choose monthly.
- Enter the expected yearly return and the number of years.
- Choose monthly compounding and start-of-period timing to match a typical SIP calculator.
The result shows the final balance, the total you put in, and the growth earned. Try a few different returns to see the range rather than relying on one number.
What the projection cannot tell you
- Returns are not fixed. Equity funds have averaged high returns over long periods in many markets, but individual years swing widely, and past returns do not guarantee future ones. A projection at a single steady rate is a planning tool, not a promise.
- Inflation reduces what the money buys. 50 lakh in twenty years will buy far less than 50 lakh today. Subtract expected inflation from the return to see the result in today's money.
- Fees and taxes reduce the return. A fund charging 1.5% a year turns a 12% market return into about 10.5% for you.
Increasing the amount each year
Many people raise their monthly investment as their salary grows, often called a step-up SIP. Even a modest yearly increase makes a large difference to the final value. To estimate it, run the calculator in stages: five years at the first amount, then use that balance as the starting balance for the next five years at the higher amount.
Quick estimates
For a single lump sum, the rule of 72 tells you how long money takes to double: at 12%, about six years. For how compounding frequency changes the result, see compound interest explained.