SIP Calculator

📊 Year-wise SIP Growth Schedule

What is a SIP?

A Systematic Investment Plan, or SIP, is a way of investing a fixed amount in a mutual fund scheme at regular intervals, typically every month, instead of investing a large sum all at once. Each instalment buys units of the fund at the prevailing Net Asset Value (NAV), so over time you accumulate units bought at different prices. This approach is widely used for long-term goals such as retirement planning, children's education or building a general investment habit.

How Does a SIP Work?

1. You choose a mutual fund scheme and decide how much you want to invest.
2. You choose an investment frequency — most commonly monthly.
3. The chosen amount is invested automatically on the selected date, typically through a bank mandate.
4. Units of the fund are purchased according to the NAV applicable on that date, so you buy more units when prices are low and fewer when prices are high — a concept known as rupee-cost averaging.
5. Over the investment period, the value of your holding can grow or fall depending on how the underlying fund and market perform.

SIP Calculator Formula

This calculator estimates the future value of a monthly SIP using the standard compound-growth formula for a series of regular investments:

FV = P × [((1 + r)^n − 1) / r] × (1 + r)

• FV = estimated future value of the SIP
• P = amount invested each month
• r = expected monthly rate of return, calculated as the annual rate divided by 12 and by 100
• n = total number of monthly instalments (years × 12)

This is the mathematical model used by this calculator to produce an estimate. It is not the same as an actual mutual fund's performance, which depends on real market movements, fund manager decisions, and applicable costs. Total invested amount is simply P × n, and wealth gain is the difference between the estimated future value and the total invested amount.

SIP Calculator Example

For a monthly investment of ₹10,000, an expected annual return of 12%, and an investment period of 10 years, this calculator's formula produces the following estimate:

• Total Invested: ₹12,00,000
• Estimated Wealth Gain: ₹11,23,391
• Estimated Future Value: ₹23,23,391

You can reproduce this example yourself using the calculator above — enter ₹10,000, 12% and 10 years to see the live result. Small rounding differences of a few rupees can appear between manual calculations and the calculator due to compounding frequency assumptions.

Total Investment vs Wealth Gain

Total investment is simply the sum of every instalment you put in — your monthly amount multiplied by the number of months. Wealth gain is the additional amount your money is estimated to have earned on top of what you invested, driven by compounding. The future value shown by the calculator is the total of these two: what you put in, plus what your investment is estimated to have earned.

What is the Power of Compounding?

Compounding happens when the returns generated by an investment are reinvested, so future returns are earned not just on the original amount but also on the returns already accumulated. In a SIP, each instalment has a different amount of time to grow, so instalments made early in the investment period generally have more time to compound than instalments made later. This is why starting earlier, or staying invested for longer, tends to have a large effect on the estimated future value, all else being equal.

SIP vs Lump Sum

A SIP spreads your investment across many smaller instalments, which averages your purchase price over time and reduces the impact of investing everything right before a market fall. A lump-sum investment puts the full amount to work immediately, which can perform better if markets rise steadily from the point of investment, but carries more timing risk. Neither approach is universally better — the right choice depends on how much you have to invest, your cash flow, your risk tolerance and your view on markets. Many investors use a mix of both.

What is Step-Up SIP?

A step-up (or "top-up") SIP is a SIP where you increase your monthly instalment periodically, for example by a fixed percentage every year, often in line with rising income. Over a long investment horizon this can meaningfully increase the total amount invested and the estimated future value compared with keeping the same instalment throughout. This calculator currently estimates a SIP with a fixed monthly instalment; it does not model annual step-ups.

How Much Should I Invest in SIP?

There is no single right amount — it depends on your income, expenses, other financial commitments and the goal you are investing toward. A common starting approach is to work backward from a goal amount and a time horizon using a calculator like this one, then check whether the resulting monthly instalment fits comfortably within your budget alongside essential expenses and an emergency fund. It's generally worth reviewing your SIP amount periodically rather than treating it as fixed forever.

Factors That Can Affect SIP Returns

• Market performance of the underlying stocks, bonds or other assets the fund holds
• Investment duration — longer periods give compounding more time to work, though they don't remove market risk
• Expected return assumption used for planning versus the fund's actual performance
• Contribution amount and frequency, including any pauses or increases
• Fund selection and management, since different funds and strategies perform differently
• Inflation, which reduces the real purchasing power of your future corpus
• Fees and expenses, such as expense ratios and exit loads, which reduce net returns