What a 10-year SIP projection is really assuming
The SIP calculator prints one future value because you typed one return. That return is applied every month for the whole ten years. Nothing in the screen is a promise that a fund will deliver it, and nothing in the screen is your tax.
Last updated: · 4 min read
₹10,000 a month for 10 years
Bar chart of about ₹18.42 lakh at 8%, ₹20.66 lakh at 10%, and ₹23.23 lakh at 12%.
- At 8%₹18.42 lakh
- At 10%₹20.66 lakh
- At 12%₹23.23 lakh
One rate, every month, for 120 months
The SIP calculator uses a monthly rate of the annual return divided by 12, and it adds the instalment at the start of each month. There is no bad year and no good year. A real decade that averages 10% can include a year that is a large loss. The single number hides that path.
₹10,000 × 120 is ₹12,00,000 invested, whatever the rate. The rate only changes the growth on top. People read the future value and forget the invested line. Both are on the result.
8%, 10% and 12% are not a menu of outcomes
At 8% the future value is about ₹18,41,657. At 10% it is about ₹20,65,520. At 12% it is about ₹23,23,391. Same saving habit. About ₹4.82 lakh between the dull rate and the cheerful one, before tax. A planning range often used on this site is roughly 10–12% for a long equity SIP and 6–8% for debt. Ten years is long enough for equity to be a considered choice and short enough that one bad stretch still matters.
The plan should work at the lower rate you would still defend. The higher rate is upside. If a school fee or a house token needs the 12% bar, raise the instalment or lengthen the tenure until the 8% bar is enough.
- Invested: ₹12,00,000.
- 8%: about ₹18,41,657. 10%: about ₹20,65,520. 12%: about ₹23,23,391.
- No tax, no exit load, no missed month.
What else the number assumes
It assumes you pay every month, including the months the market is falling. It assumes you do not redeem in year seven. It assumes the return you typed is before tax. Redeeming can cost tax this calculator does not compute, and this article will not invent the rate.
It also assumes today’s instalment is the right unit. Inflation is a different switch. A goal priced in today’s fees should be inflated first, in the inflation goal calculator, or read with the SIP toggle, which discounts a future corpus at a rate you set. The toggle’s starting value is 6%. That is not a forecast either.
How to use the screen before you pick a fund
Type the instalment you can pay in a dull month. Run 8% and 12%. Write down both values and the invested amount. Only then look at a fund. A factsheet CAGR is a past window. Typing it in as the next ten years is a choice, not something the factsheet promised.
If the two results are both short of the goal, the fund is not the missing piece. The instalment or the date is. Changing funds does not change the formula.
Worked example: ₹10,000 for 10 years at three rates
Start-of-month instalments. No pause, no tax, no step-up.
| Item | Figure |
|---|---|
| Invested | ₹12,00,000 |
| Value at an assumed 8% | ₹18,41,657 |
| Value at an assumed 10% | ₹20,65,520 |
| Value at an assumed 12% | ₹23,23,391 |
| Gap, 8% to 12% | about ₹4,81,734 |
| What is not in the gap | Tax, exit load, and a year you skip |
A 10-year SIP projection is a constant return, a full set of instalments, and no tax. Keep the goal on the 8% figure if you would not rely on 12%. The calculator will reprint the number for any rate you type. It will not make that rate true.
Sources
Results from FinanceChacha are estimates for planning, not financial or tax advice. Read the disclaimer.
Try the calculators
Open a calculator this guide refers to and run your own numbers.