Impact of a 1% Return Difference
The same money at three returns, one percentage point apart.
- One point better
- At your assumed return
- One point worse
- Total invested — the same in all three
- ₹60.00L
- Corpus at 11.0%
- ₹3.18Cr
- Corpus at 13.0%
- ₹4.54Cr
- Corpus at 12.0%
- ₹3.80Cr
All three columns invest exactly the same money — only the return differs. The gap between them is not one percent of the corpus; it compounds on itself every year, so it widens with the horizon rather than staying in proportion to it. That is why a single percentage point of expense ratio, or of return given up for a fund that simply performs worse, costs a share of the final corpus far larger than the number suggests. Returns are assumed and constant here; real markets deliver them unevenly, and the comparison is between plans rather than a forecast of any one of them.
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Independent · No commissions · No fund-house data — how the numbers are computed
How it works
This calculator runs one investment plan at three returns — the rate you assume, one percentage point below it, and one above — and reports what that single point is worth in rupees. Every column invests exactly the same money for exactly the same number of years; only the return differs.
The defaults are ₹20,000 a month for 25 years at 12% p.a. with no step-up. At those numbers the plan invests ₹60,00,000 and the one-point gap in either direction moves the final corpus by roughly a sixth of itself — a far larger share than the input suggests, because the difference compounds on itself every year rather than staying in proportion to the horizon.
That is the whole reason a percentage point deserves a calculator. One point can come from an expense ratio, a Regular plan's trail commission, a platform fee, a fund that simply performs worse than its category, or a more conservative allocation than the goal needed. The source does not matter to the arithmetic; the size of the gap does.
Returns here are assumed and constant. Real markets deliver them unevenly, and no fund can promise a rate. Use the output to compare plans against each other — a cheaper plan, a longer horizon, a larger contribution — rather than as a prediction of what any one of them will produce.
Corpus = SUM over each month of contribution x (1 + r)^(months remaining), with r = annual rate / 12Each instalment is compounded monthly from the month it lands until the end. Running the same series at r, r - 1% and r + 1% and taking the differences is all this calculator does.
Frequently asked questions
How much difference does 1% of return make over 25 years?
Far more than 1%. Because the difference compounds on itself each year, a single percentage point typically moves a 25-year SIP corpus by roughly 15 to 20 percent, not by one percent. The exact figure depends on the horizon and the base rate: the longer the money compounds, the larger the share of the final corpus that one point accounts for.
Why does a small difference in expense ratio matter so much?
An expense ratio is deducted from returns every year, so a fund charging one percentage point more does not cost you one percent of the final corpus; it costs you the compounded value of that annual deduction over the whole holding period. This is the same arithmetic as any other one-point gap in return, which is why a Regular plan's trail commission and a genuinely underperforming fund cost the same thing if the shortfall is the same size.
Does the total amount invested change when the return changes?
No. The amount invested is set entirely by the monthly contribution, the number of years, and any annual step-up. All three columns in this calculator invest exactly the same rupees, so the entire difference between them is the return earned on that money and nothing else. This is worth checking on any comparison tool, because a difference driven partly by different contributions is not a comparison of returns at all.
Is a higher assumed return the same as a better plan?
No. A higher assumed return usually means a higher equity allocation, which means a portfolio that can fall further before it recovers. The arithmetic here shows what the extra point would be worth if it arrives; it says nothing about the odds of earning it or about whether the investor would stay invested through the falls that come with chasing it.
Go further
The same gap priced from AMFI's disclosed expense ratios for both plans.
The other lever — raise the contribution instead of the return.
What the same plan loses to a late start rather than a lower return.
Where the percentage point usually comes from.
Why the gap widens with the horizon instead of holding steady.