SIP Calculator

What does this SIP Calculator do?

A Systematic Investment Plan (SIP) is a way of investing a fixed amount every month, typically into a mutual fund, rather than investing a lump sum all at once. This calculator projects the future value of your SIP based on your monthly contribution, expected annual return, and investment period.

The formula

FV = M × [((1 + r)ⁿ − 1) ÷ r] × (1 + r)

Where M is your monthly investment, r is the monthly rate of return (annual rate ÷ 12 ÷ 100), and n is the total number of months. This is the future value of an "annuity due" — each of your monthly contributions compounds for a different number of months, since the first contribution has the most time to grow and the last has the least.

Step-by-step example

Investing ₹10,000 per month at an expected 12% annual return for 10 years (n = 120 months, r = 1% monthly):

Total invested = 10,000 × 120 = ₹12,00,000. Using the formula above, the future value comes out to approximately ₹23,23,391 — meaning your estimated gains are roughly ₹11,23,391 on top of what you actually put in, purely from compounding.

Tips & common mistakes

• The "expected annual return" is an assumption, not a guarantee — actual mutual fund returns vary year to year, and this calculator only shows what a constant average return would produce.
• Starting a SIP earlier matters more than investing a larger amount later — an extra 5 years of compounding often outweighs doubling your monthly contribution.
• Don't confuse SIP returns with a lump-sum investment's future value — the formulas are different because SIP contributions are staggered over time rather than invested all at once.

Why SIPs are popular for long-term investing

A Systematic Investment Plan spreads your investment across many months rather than committing a lump sum all at once, which has two practical benefits: it fits naturally into a monthly income/budgeting rhythm, and it averages your purchase price across market ups and downs over time (a concept often called "rupee-cost averaging"). Because you're buying more units when prices are lower and fewer when prices are higher, a disciplined SIP can smooth out some of the impact of short-term market volatility compared to a single lump-sum investment at a potentially unlucky moment.

How the "expected return" assumption works — and its limits

This calculator asks for a single expected annual return and assumes that return is constant every year, compounding smoothly. In reality, markets don't move in a straight line — some years might return 25%, others might be negative. Over long horizons (10+ years), historical average returns are a reasonable planning assumption, but any individual year, or even any individual decade, can deviate meaningfully from the long-run average. Treat the projected future value as a planning estimate, not a promise.

More tips

• Starting a SIP early is one of the highest-leverage financial decisions available to a young investor — the earlier contributions have dramatically more time to compound than later ones.
• Increasing your monthly SIP amount over time (a "step-up SIP") as your income grows can meaningfully boost your final corpus beyond what a flat monthly amount projects — this calculator models a flat monthly contribution.

SIP versus lump sum: which grows more?

Mathematically, if you already have the full amount available and markets rise steadily, investing it all as a lump sum at the start typically outperforms spreading it via SIP, simply because more money is invested for longer. SIPs earn their popularity not from out-performing lump sums in every scenario, but from making disciplined investing practical for people investing out of monthly income, and from reducing the risk of unlucky lump-sum timing right before a market downturn.

The effect of stopping and restarting a SIP

Pausing a SIP during a market dip (a common emotional reaction) usually works against the investor, since dips are exactly when a fixed monthly contribution buys more units at a lower price — a core part of how rupee-cost averaging is supposed to work in your favor over a full market cycle.

A second worked example: shorter time horizon

The same ₹10,000 monthly SIP at 12% expected return, but for just 5 years instead of 10: n = 60 months, r = 1%. Future value ≈ ₹8,24,449, against total invested of ₹6,00,000 — gains of about ₹2,24,449. Compare this to the 10-year example's roughly ₹11,23,391 in gains on the same monthly contribution — nearly 5x more gains for only double the time, illustrating how much of SIP's power comes from time in the market.

Frequently asked questions