worldofcalcsSIP Calculator
Investment Summary
Monthly Investment
Tenure
Expected Rate
Total Invested
Estimated Gains
Future Value
Yield on Invested
Recent Calculations
Understanding SIP Investment
A Systematic Investment Plan (SIP) is a structured way to invest a fixed amount at regular intervals—usually monthly—into mutual funds or similar products. Staying consistent helps your money compound, building wealth steadily over time.
SIP Formula
The formula used to calculate the future value of SIP is:
- FV = Future Value
- P = Monthly Investment Amount
- i = Periodic Interest Rate (Annual Rate / 12 / 100)
- n = Total Number of Payments (Years × 12)
Benefits of SIP
- Rupee Cost Averaging: Invest a fixed sum regularly to buy more when prices are low and fewer when prices are high, smoothing your average purchase cost.
- Power of Compounding: Returns get reinvested, so gains can snowball across longer horizons.
- Disciplined Investing: Automatic, recurring contributions foster a savings habit and reduce emotional decision making.
How to Use This Calculator
- Enter your monthly investment amount.
- Select the investment horizon in years.
- Choose an expected annual return rate.
- Review the Investment Summary and Growth Chart for projected outcomes.
FAQs
- Minimum amount to start a SIP can be as low as ₹500 per month depending on the fund.
- Returns are computed on compounded monthly contributions; actual returns vary by fund and market.
- A long-term expected return range for equity funds is often 12–15% annually, but it is not guaranteed.
- You can usually increase your SIP amount later through top-up features offered by many funds.
Tips for Success
- Start early to benefit more from compounding.
- Stay invested for the long term to smooth market volatility.
- Review your portfolio periodically and rebalance if needed.
- Increase your SIP amount as your income grows.
Disclaimer
What is a SIP?
A systematic investment plan (SIP) invests a fixed amount in a mutual fund every month. Because you buy every month, you get more units when prices are low and fewer when they are high (rupee cost averaging), and you don't have to time the market. Over long periods, compounding does most of the work: the returns themselves start earning returns.
How SIP returns are calculated
M is the value at the end, P the monthly SIP, r the monthly return (annual return ÷ 12 ÷ 100) and n the number of months. Each instalment is assumed to be invested at the start of the month. Real mutual fund returns vary from year to year; this shows what a steady average return would give.
Things to know about SIPs
- Mutual fund returns are not guaranteed. Equity funds can fall 20–40% in a bad year; SIPs work best over 7 years or more.
- Starting early matters more than the amount: ₹10,000 a month at 12% grows to about ₹6.5 crore from age 25 to 60, but about ₹1.9 crore if you start at 35.
- Step up your SIP each year with your salary hikes. Even 10% a year makes a large difference.
- Gains on equity funds held over 12 months are taxed at 12.5% above ₹1.25 lakh a year; within 12 months, at 20%. Each SIP instalment has its own holding period.
- ELSS funds have a 3-year lock-in and count towards the ₹1.5 lakh 80C deduction in the old regime only.
- Choose direct plans: they have lower expense ratios than regular plans sold through distributors, which adds up over decades.
- Don't stop your SIP when markets fall; those instalments buy the most units.
Worked example: ₹10,000 a month
- SIP of ₹10,000 a month for 10 years (120 instalments) at an average 12% a year
- You invest ₹12,00,000 in total
- Estimated value after 10 years: ₹23,23,391, a gain of ₹11,23,391
- Raising the SIP by 10% every year (a step-up) grows it to ₹33,74,326 on ₹19,12,491 invested
- At an 8% average return instead, the same ₹10,000 a month grows to ₹18,41,657
What a SIP can grow to
Estimated value at an average 12% a year.
| Monthly SIP | 10 years | 20 years | 30 years |
|---|---|---|---|
| ₹2,000 | ₹4,64,678 | ₹19,98,296 | ₹70,59,828 |
| ₹5,000 | ₹11,61,695 | ₹49,95,740 | ₹1,76,49,569 |
| ₹10,000 | ₹23,23,391 | ₹99,91,479 | ₹3,52,99,138 |
| ₹25,000 | ₹58,08,477 | ₹2,49,78,698 | ₹8,82,47,844 |
| ₹50,000 | ₹1,16,16,954 | ₹4,99,57,396 | ₹17,64,95,689 |
Illustration only; actual returns vary.