What is the formula used in the SIP calculator?

The SIP calculator uses the future value formula for recurring investments: Maturity = P × ((1 + r)^n - 1) / r × (1 + r), where P is the monthly investment amount, r is the monthly rate of return (annual return ÷ 12 ÷ 100), and n is the total number of monthly investments.

Is a SIP better than a lump sum investment?

SIPs reduce market timing risk through rupee-cost averaging — you buy more units when markets fall and fewer when they rise. For most long-term investors, SIPs are more disciplined and less stressful than lump sum investments. However, if you already have a large corpus and markets are at attractive levels, a lump sum may outperform.

What return rate should I assume for SIP calculations?

Historical returns: Equity mutual funds 12-15% p.a. (long-term), Hybrid funds 9-12% p.a., Debt funds 7-9% p.a. Past performance does not guarantee future returns. For conservative planning, assume 10-12% for equity SIPs and 7-8% for balanced SIPs.

Systematic Investment Plan

SIP Calculator — Estimate Your Mutual Fund Returns

Calculate the maturity value of your monthly mutual fund investments using the power of compounding. Enter your monthly amount, expected return rate, and investment period to see your total corpus, wealth gain, and year-by-year growth.

📈 Enter Your SIP Details

Monthly Investment (₹)

Expected Annual Return (%)

12%

Investment Period (Years)

10Y

Step-Up Option — Annual increase in SIP amount (%)

Formula: M × [(1+r)ⁿ − 1] / r × (1+r)
Where M = monthly amount, r = monthly rate, n = number of months

📊 Your SIP Results

Enter values and click Calculate

Year-by-Year Growth

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Disclaimer: This calculator is provided for educational and informational purposes only. Results are estimations based on assumed constant returns and do not constitute professional financial, investment, or tax advice. Past performance does not guarantee future returns. Actual mutual fund returns may vary. Consult a SEBI-registered financial advisor before making investment decisions.

How the SIP Calculator Works

The Formula: The SIP calculator uses the Future Value of Annuity Due formula, which assumes investments are made at the beginning of each period (month):

FV = P × [(1 + r)ⁿ − 1] / r × (1 + r)

Where:

FV = Future Value (maturity amount)
P = Monthly investment amount
r = Monthly rate of return (Annual return ÷ 12 ÷ 100)
n = Total number of monthly investments (Years × 12)

Step-by-Step Worked Example

Let us say you invest ₹10,000 per month for 15 years expecting an annual return of 12%.

Step 1: Monthly rate = 12% ÷ 12 = 1% = 0.01
Step 2: Total months = 15 × 12 = 180
Step 3: (1 + 0.01)¹⁸⁰ = 5.9958
Step 4: (5.9958 − 1) ÷ 0.01 = 499.58
Step 5: 499.58 × (1 + 0.01) = 504.58
Result: FV = ₹10,000 × 504.58 = ₹50,45,760 (approximately ₹50.46 lakhs)

Your total investment is ₹10,000 × 180 = ₹18,00,000. The wealth gained through compounding is approximately ₹32,45,760 — nearly 2.8× your total investment.

Comparison Table: SIP Returns by Tenure

Investment (₹/mo)	Return Rate	Tenure	Total Invested	Maturity Value	Wealth Gain
₹5,000	12%	5 years	₹3,00,000	₹4,08,350	₹1,08,350
₹5,000	12%	10 years	₹6,00,000	₹11,61,692	₹5,61,692
₹5,000	12%	15 years	₹9,00,000	₹25,22,880	₹16,22,880
₹10,000	12%	20 years	₹24,00,000	₹99,91,480	₹75,91,480
₹10,000	15%	20 years	₹24,00,000	₹1,50,73,951	₹1,26,73,951

Frequently Asked Questions

What is a Systematic Investment Plan (SIP)? ▼

SIP is a method of investing a fixed amount regularly (usually monthly) in mutual funds. It leverages rupee-cost averaging and compounding to build wealth without requiring a large lump sum. SIPs are popular in India for equity mutual fund investments, with amounts as low as ₹500 per month.

What is the step-up SIP option? ▼

A step-up (or top-up) SIP lets you increase your investment amount by a fixed percentage each year — typically 5-15%. This aligns with expected salary increases and accelerates wealth creation. For example, starting at ₹5,000/month with a 10% annual step-up and 12% returns over 20 years yields approximately ₹1.04 crores vs. ₹99.9 lakhs without step-up — a significant difference for the same initial commitment.

Is SIP better than a lump sum investment? ▼

SIPs reduce market timing risk through rupee-cost averaging — you buy more units when markets dip and fewer when they peak. For most long-term investors with regular income, SIPs provide discipline and reduce stress. Lump sum investing can outperform in consistently rising markets but carries higher entry timing risk. A balanced approach: use SIP for regular savings, and deploy large windfalls via Systematic Transfer Plans (STP) over 3-6 months.

What return rate should I assume for planning? ▼

Conservative: 10% for equity funds; Moderate: 12% (Nifty 50 historical average); Optimistic: 15%. For debt funds, assume 7-9%. Always use a conservative estimate for financial planning. Past performance does not guarantee future returns. Consider using 10-11% as a realistic long-term expectation for diversified equity mutual funds in India.

What is the minimum SIP amount in India? ▼

Most Indian mutual funds allow SIPs starting at ₹500 per month. Some funds may have higher minimums of ₹1,000 or ₹5,000. There is no upper limit. You can also set up multiple SIPs across different funds for diversification. Most fund houses and platforms (Zerodha Coin, Groww, Paytm MF, ET Money) offer SIP facilities with auto-debit from your bank account.