SIP Calculator

How a SIP grows over time

A Systematic Investment Plan (SIP) invests a fixed amount at regular intervals, usually every month, into a mutual fund. This calculator estimates the future value of those instalments for an assumed annual return. Because each instalment starts earning on its own date, the earliest instalments benefit the most from compounding.

The formula

Future value = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i)

• P is the monthly instalment.
• i is the monthly rate of return, equal to the expected annual return divided by 12 and 100.
• n is the number of months you invest.

Worked example

Invest ₹5,000 every month for 10 years (n = 120) at an assumed 12% a year (i = 0.01). You will have put in ₹6,00,000 in total, and the estimated value is about ₹11.62 lakh, so roughly ₹5.62 lakh comes from returns. Starting the same SIP ten years later would need far larger instalments to reach the same goal, which is why starting early matters more than the exact amount.

Using the estimate sensibly

• Returns are not guaranteed. Equity funds move up and down; the figure shown is a projection at one steady rate, not a promise. Try 8%, 10% and 12% to see a range.
• Increase the amount yearly. Raising your SIP by 10% each year with your income can change the final value dramatically.
• Think in real terms. Inflation of 5–6% reduces what the final amount can buy, so set goals in today's money and adjust.
• Check expense ratios and taxes. Fund costs and capital-gains tax reduce your net return.

Frequently asked questions

Is SIP better than a lump-sum investment?

Neither is always better. SIP spreads your purchases across market highs and lows and builds discipline, while a lump sum can do better if invested before a long rise. SIP suits people who invest from monthly income.

What return should I assume?

Use a conservative number you would be satisfied with. Long-term equity returns vary widely by period and fund, so avoid planning around the best-case figure.