SIP Calculator

What is a SIP Calculator?

A SIP (Systematic Investment Plan) calculator estimates the future value of your regular monthly mutual fund investments based on your expected rate of return and investment horizon. Instead of investing a large lumpsum at once, SIP lets you invest a fixed amount every month - and the calculator tells you how much that disciplined habit will be worth over time.

This tool uses the standard SIP future value formula to give you an instant projection. You can tweak any of the three inputs - monthly amount, expected return rate, and duration - to compare scenarios and make informed investment decisions.

SIP Calculation Formula

The future value of a SIP is calculated using the following formula:

FV = P x [((1 + r)^n - 1) / r] x (1 + r)

Where P = monthly investment amount, r = monthly rate of return (annual rate / 12 / 100), n = total number of months (years x 12).

The last factor, (1 + r), is there because the formula assumes each instalment goes in at the start of the month and so earns a full month of growth in the month it is invested.

Worked Example

Using the calculator's starting values, ₹5,000 a month for 10 years at an expected 12% a year:

• r = 12 / 12 / 100 = 0.01 and n = 10 x 12 = 120 months.
• (1 + r)^n = 1.01^120, which is about 3.3004.
• FV = 5,000 x [(3.3004 - 1) / 0.01] x 1.01 = 5,000 x 230.04 x 1.01, about ₹11,61,695.
• You invest 5,000 x 120 = ₹6,00,000, so the estimated gain is about ₹5,61,695.

Time does most of the work. Keep the same ₹5,000 going for 20 years instead of 10 and the estimate rises to about ₹49,95,740 on ₹12,00,000 invested: twice the contributions, but more than four times the final value. The rate matters too. At 10% instead of 12%, the 10-year figure drops to about ₹10,32,760.

How to Use This SIP Calculator

1. Set your monthly investment: Use the slider or type directly. The range is ₹500 to ₹1,00,000 per month.
2. Enter your expected return rate: Equity funds have historically delivered 10-15% p.a. over the long term in India.
3. Choose your investment period: Longer durations benefit more from compounding. The slider runs from 1 to 30 years.
4. Read the results instantly: Future value, total invested, and wealth gained, with a doughnut chart breakdown.

Benefits of SIP Investing

• Rupee cost averaging: Buy more units when markets are low and fewer when high, averaging your purchase cost over time.
• Power of compounding: Returns get reinvested, generating further returns.
• Financial discipline: Automates investing, removing the temptation to time the market.
• Flexibility: Start with as little as ₹500/month, increase, decrease, pause, or stop anytime.

What the Estimate Assumes

The calculator applies one steady rate every month, which real markets never do. Equity fund returns arrive unevenly, with good and bad years, so the actual value of a SIP depends on the order of those returns as well as their average. Fund houses report SIP performance as XIRR, a rate that accounts for each instalment's own date, and that figure will not match this projection exactly. Treat the result as a planning estimate, not a promise.

• Monthly compounding: the annual rate is divided by 12, so an input of 12% compounds to about 12.68% over a full year. If you are working from an annualised fund return, you can enter a slightly lower figure to compensate.
• No costs or tax: exit loads and capital gains tax on redemption are not deducted. A fund's expense ratio is already reflected in its NAV, so use a return figure that is net of expenses.
• Fixed instalment: the amount stays the same for the whole period. A step-up SIP, where you raise the instalment every year, will end higher than shown here.
• No inflation: the result is in future rupees. At 6% inflation, the ₹11,61,695 from the example would buy roughly what ₹6,48,700 buys today.

A sensible habit is to run three cases, for example 8%, 10% and 12%, and plan around the lowest one, so that a weaker decade still meets your goal.