Every office SIP group chat uses 12 percent like it is a government rate. It is not. I run 8, 10 and 12 so you see the spread.
Twelve percent is a planning habit, not a lock. Markets dont give a straight line. Some years look kind. Some years look like you should have left the money in a FD and gone to sleep.
The SIP calculator has Monthly SIP, Assumed yearly return, and Duration in years. Default return is 12 because that is the habit number people type anyway. I left it there so you can change it. I did not leave it there as a promise.
If someone says 12 is safe, they are selling calm. I dont sell that.
What this box actually does
It compounds a monthly amount at the yearly rate you typed, the usual school SIP formula. You put money in. Time passes. A assumed return fattens the corpus. Result is a rough future value. Not a NAV. Not a statement.
₹3,000 a month for 10 years at 12 percent assumed is near ₹6.97 lakh. You put in ₹3.60 lakh. The rest is the assumed market, not a bank FD.
At 10 percent the corpus is lower. At 8 percent lower still. I want you to see those three, not frame the 6.97 lakh and forget.
I tried this on my own 5,000 SIP. I ran 8, 10, 12. The gap at year 10 already looked like a used two-wheeler. At year 20 the gap looks like a room in a house. That is why the assumption matters more as years grow.
This is not step-up SIP. If you will raise the amount each year, this version will not do it. Raise monthly yourself and run again, or accept a underestimate if you actually step up.
Expense ratio is not deducted as a separate box. If you want to be conservative, drop the return by 1 percent in your head. 12 becomes 11. Or just use 10 and relax a bit.
Lumpsum sitting next to SIP is not in this page. Use the compound interest tool for the lumpsum and add in a notebook.
I dont pick a fund. I dont know your risk. I dont know if you will pause when EMI gets tight. Pausing is the real-world leak. The formula assumes you keep paying.
Why 12 became the office default
Someone showed a long equity chart. Someone else said "equity gives 12 to 15 long term". The slide entered WhatsApp. Then it entered every SIP calculator default on the internet. Then it entered my default too, because if I put 8, people say I am negative, and if I put 15, I am a tout.
12 sits in the middle of that culture. Culture is not a lock.
Past returns of a index or a fund are not your next 10 years. Sequence matters. If the ugly years hit when you start, the same average can still feel different. This formula assumes a smooth rate. Real NAV is not smooth.
Debt funds, hybrid, small cap, index. They dont share one 12. If your SIP is a conservative hybrid, 12 is a stretch. If it is a all-equity bet, 12 is still not safe. It is just a planning number people use for equity-ish stories.
FD is not 12. If you compare this SIP result with a FD calculator at 7 percent, you must also compare risk. I have a FD page. Use both. Dont paste SIP 12 next to FD 7 and call it free lunch.
I will not quote a fake SEBI circular that "allows" 12. There is no such comfort paper for your kitchen table.
Inflation is not in the box. ₹6.97 lakh after 10 years buys less than ₹6.97 lakh today. I mention that so the number does not look like a castle. You can knock 5 or 6 percent off in your head for a real-ish view. Rough. I dont have a inflation switch here.
Run 8, 10 and 12, write all three
This is my actual habit.
Same monthly. Same years. Change only the return box.
Write corpus at 8. Write corpus at 10. Write corpus at 12.
The plan I take to a family talk uses the 8 or 10 number for "can we depend on this". The 12 number is the "if markets are kind" line. I dont take a EMI or a school fee plan that only works at 12.
If 8 already meets the goal, good. You have slack.
If only 12 meets the goal, the goal is tight. Raise the SIP, or extend years, or cut the goal. Dont raise the return to 15 to make the goal fit. That is how people get disappointed at year 7.
I did the 15 trick once on a sheet to "see". Then I almost believed it. I deleted the row.
For SIP of 3,000 for 10 years, rough corpus I walk the default. Same warning lives there.
If you drop monthly to 2,000 because cash is tight, run the three rates again. Dont scale the 6.97 lakh by eye and miss compounding.
Years matter more than people think. 10 vs 15 at the same 10 percent is a different life. Play with years after you pick a honest rate.
I also run a 0 percent case sometimes. That is just 12 times monthly times years. The pile you put in. Then the assumed gain is corpus minus that pile. Seeing the pile keeps me humble.
Safe is the wrong word for a market SIP
Safe is a word I use for a scheduled bank FD, and even that has lock-in and TDS stories.
Equity SIP can fall after you start. The calculator will not show a dip year. It only shows a end number at a smooth rate.
If you need the money in 2 years for a visa or a wedding, I would not use 12 in the return box as a plan. I might not use this tool as the main plan at all. Short horizon plus equity is a different conversation. This page will still compute a 2 year 12 percent figure if you force it. That figure can lie about risk even when the maths is correct.
If the horizon is 15 years and you can keep SIPing through a ugly market, 12 as one of the scenarios is a common planning habit. Still not a lock. I still run 8.
Emergency fund is not a SIP return question. Dont skip the emergency fund because the SIP corpus at 12 looks fat on a graph.
I pause SIPs when a loan starts, sometimes. The formula does not pause. If you know you will pause, reduce years or reduce monthly to the amount you can keep in a bad year.
Tax on gains is not in this box. Redeeming can have tax. I will not invent this year's slab story here. Official tax pages win. Net corpus can be less than the toy number.
If a agent says 12 is guaranteed on a market product, I walk. Guarantees and equity SIP should not share a sentence. Some insurance-plus-investment pitches blur this. This calculator is not that pitch. It is a formula.
How I fill the boxes on this site
Monthly SIP. What I can actually keep doing after rent, EMI, and the grocery bill that grew. Not the amount that looks nice in a goal app.
Assumed yearly return. I start at 10 for a mixed honest mood. I also run 8 and 12. I rarely plan on 15.
Duration. Years I can leave it. If I might need a chunk in year 6, I dont type 20 and smile.
Calculate. Read corpus. Read the amount I put in, if the result shows it. Remember the gap is assumed.
Then I go to FD and RD tools if part of the money should be boring. Boring money is allowed.
Related reading on this site, simple interest and compound interest, real difference, if the word compound still blurs. SIP is compound in spirit, with monthly adds.
I dont store your SIP amount. No login. Refresh and it is gone.
Estimate. Statement from the fund house and the registrar win. This page will not match a real folio because real NAVs wiggle and you might have missed a month.
When a cousin asks if 12 is safe, I say no. I say it is a habit number. I send the tool and tell them to type 8, then 10, then 12. The spread is the answer. The single 12 is a poster.
I still use 12 in screenshots because people recognise it. Recognition is not safety. I wanted this article so the default does not hypnotise you.
If your stomach drops when you type 8 and the goal breaks, listen to that. Raise the SIP or the years. Dont raise the fantasy rate. I have to tell myself that every appraisal season when a new SIP goal appears in the team chat.