Tool · From Chapter 4 of The Last Salary
What does the fee really cost your SIP?
A fee of 1.5% a year sounds like nothing. It is charged every year, on your whole balance, in good years and bad. Put in your own numbers and see what it takes.
Median Nifty 50 index fund (direct) vs median active equity fund (regular), AMFI TER data, 31 March 2026.
Low-cost option
Fee 0.20% a year
Higher-cost option
Fee 1.50% a year
What the higher fee costs you
23% of your corpus · You invest ₹36.0 lakh
Corpus at the end of each year
The gap, year by year
| After | Low-cost | Higher-cost | Extra lost to fee | Share of corpus |
|---|---|---|---|---|
| 10 years | ₹22.0 lakh | ₹20.5 lakh | ₹1.4 lakh | 7% |
| 15 years | ₹46.4 lakh | ₹41.5 lakh | ₹4.8 lakh | 10% |
| 20 years | ₹89.0 lakh | ₹76.2 lakh | ₹12.8 lakh | 14% |
| 25 years | ₹1.63 crore | ₹1.33 crore | ₹30.1 lakh | 18% |
| 30 years | ₹2.93 crore | ₹2.27 crore | ₹66.1 lakh | 23% |
How this is calculated
Each option earns the market return minus its fee. We turn that yearly rate into a monthly one, then apply the standard future-value formula for a monthly investment, with each instalment invested at the end of the month. This is the same method used in Chapter 4 of The Last Salary, so you can reproduce it with any calculator. 12% is an assumption, not a guarantee. Real returns vary year to year, and taxes are not included.
The fee is only half of it
A low fee builds a bigger corpus. It still does not pay you a rupee until you start selling it. That is the other half of the argument.
For education only. Not investment advice. Please consult a qualified financial professional before acting.