How a goal SIP is worked out
This calculator answers the planning question directly: given a target amount and a deadline, how much do you need to invest every month? Existing savings are grown first, so the SIP only has to cover what is left.
Formula
Monthly SIP = gap ÷ [ (((1 + i)^n − 1) ÷ i) × (1 + i) ]
- gap — target minus the future value of what you already hold
- i — expected annual return ÷ 12 ÷ 100
- n — number of months until the goal
- Existing savings are compounded at the same expected return
How the requirement is worked out
Suppose you need ₹25 lakh in ten years, expect 12% a year, and already hold ₹2 lakh. That ₹2 lakh grows to about ₹6.21 lakh on its own, leaving a gap of roughly ₹18.79 lakh to fund with a SIP of about ₹8,090 a month.
Without the existing ₹2 lakh, the same goal would need about ₹10,760 a month. Money you already have does disproportionate work because it compounds for the entire period.
Time matters far more than return
The same ₹25 lakh goal needs about ₹26,000 a month over five years, ₹8,090 over ten, and only ₹2,790 over fifteen. Doubling the horizon cuts the monthly requirement to roughly a third.
That is why the honest lever in goal planning is starting earlier or extending the deadline — not assuming a higher return, which raises risk without changing much of the arithmetic.
Match the instrument to the horizon
Equity funds are appropriate when the goal is at least seven years away, because time smooths out market cycles. For goals three to seven years out, a mix with a meaningful debt allocation is safer.
Below three years, use recurring deposits, short-duration or liquid funds. A 12% assumption on a two-year goal is not a plan, it is a bet — and if it fails there is no time to recover.
Protect the goal as it approaches
Shift the accumulated corpus progressively into debt in the last two or three years. A 30% market fall shortly before the deadline can undo years of saving, and there is no time left to recover it.
Review the plan annually. If returns have run ahead of the assumption, you can reduce the SIP; if they have lagged, increasing the amount early is far less painful than a large catch-up later.
Example: ₹25 lakh in 10 years at 12%
- Target
- ₹25,00,000
- Existing savings
- ₹2,00,000
- Existing grows to
- ≈ ₹6,21,000
- Gap to fund
- ≈ ₹18,79,000
- Monthly SIP needed
- ≈ ₹8,090
- Same goal in 5 years
- ≈ ₹26,000 a month
You invest about ₹9.7 lakh in instalments plus the ₹2 lakh you already had; returns supply the remaining ₹13 lakh or so of the target.