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Finance
SIP Calculator
A systematic investment plan puts a fixed amount into a mutual fund every month. Enter your monthly amount, an expected return and a time period to see what the investment could grow to, and how much of that growth is returns rather than your own money.
How to use this calculator
- Enter the amount you plan to invest each month.
- Enter an expected annual return. Be realistic and consider using a lower figure as a sanity check.
- Set the number of years you plan to keep investing.
- Optionally add an annual step-up if you intend to raise your SIP each year as your income grows.
Formula
FV = P × ((1 + i)ⁿ − 1) / i × (1 + i)
- FV
- future value of the investment
- P
- monthly investment amount
- i
- monthly rate of return, that is the annual rate ÷ 12 ÷ 100
- n
- total number of instalments
The final (1 + i) assumes each instalment is invested at the start of the month. With a step-up, the calculator works month by month instead, since the instalment changes each year.
Worked example
₹10,000 invested every month for 10 years at an assumed 12% a year.
- Monthly rate (i)12 ÷ 12 ÷ 100 = 0.01
- Instalments (n)10 × 12 = 120
- Total invested10,000 × 120 = ₹12,00,000
- Future value10,000 × ((1.01¹²⁰ − 1) / 0.01) × 1.01
The projected value is about ₹23,23,391, of which roughly ₹11,23,391 is estimated return on ₹12,00,000 invested.
Why SIP returns look surprising at first
Each instalment is invested at a different time, so each one compounds for a different length of time. The first instalment of a ten-year SIP compounds for the full ten years; the last one compounds for a month. The total is the sum of many small compounding streams, which is why the growth curve steepens sharply in the later years.
The year-by-year table below makes this visible. In the early years, most of the balance is money you put in. Later, returns start to outgrow contributions.
What a step-up does
A step-up raises your monthly investment by a fixed percentage each year. Because the increases apply to every remaining year, even a modest 10% step-up changes the final figure substantially over a long period. It also keeps your investing in line with salary growth and inflation.
Expected return is an assumption, not a promise
This calculator applies one constant rate of return. Real markets do not behave that way: a fund can fall for two years and rise sharply in the third. The order of those years matters for the final amount, especially over shorter periods. Treat the output as a projection for planning, not a forecast.
Things to keep in mind
- Results are before tax. Gains on equity mutual funds in India are taxed as capital gains, with rates depending on the holding period.
- Expense ratios and exit loads reduce real returns and are not deducted here.
- Past performance of any fund does not guarantee the return you enter.
Frequently asked questions
What return should I assume for a SIP?
There is no single right answer. Many people use a long-run figure in the low teens for diversified equity funds and a lower figure for hybrid or debt funds, but returns vary a great deal. Run the calculator twice, once with an optimistic rate and once with a conservative one, and plan around the lower result.
Is a SIP better than a lump sum investment?
They answer different needs. A SIP suits money that arrives monthly, such as salary, and spreads your purchase price across market levels. A lump sum invests everything at one price, which helps if markets rise afterwards and hurts if they fall. Use the compound interest calculator for lump sum projections.
Can I stop a SIP whenever I want?
Yes. Open-ended mutual fund SIPs can usually be paused or stopped without a penalty, though exit loads may apply if you redeem units soon after buying them. Check your fund's scheme document.
What does a 10% annual step-up do to my final amount?
It raises your monthly investment by 10% each year, so the contributions in the later years are much larger. Over a long horizon the difference in final value is substantial. Set the step-up field to 10 and compare the result with 0 to see the effect for your own numbers.
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