SIP Investment Calculator
A Systematic Investment Plan (SIP) lets you build wealth gradually by investing a fixed amount every month. Using the compound interest formula for recurring contributions — FV = P × [((1 + r)^n − 1) / r] × (1 + r) — this calculator projects the future value of your portfolio based on your monthly contribution, expected annual return, and investment horizon.
SIPs are one of the most powerful vehicles for long-term wealth creation because they benefit from rupee-cost averaging and the exponential effect of compounding. By investing consistently, even modest monthly amounts can grow into substantial sums over a decade or more, as the gains themselves generate further gains.
How it works
FV = P × [((1 + r)^n − 1) / r] × (1 + r), where P = monthly contribution, r = annual rate ÷ 12, n = years × 12. Total Invested = P × n. Total Gains = FV − Total Invested.
Use cases
- Planning retirement savings with monthly mutual fund contributions
- Projecting college fund growth for a child over 15–18 years
- Comparing the impact of different annual return rates on the same contribution
- Estimating how long it takes to reach a specific savings goal
- Evaluating the benefit of starting investments earlier versus later
Frequently asked questions
How is SIP maturity amount calculated?
The maturity amount uses the future value of an annuity-due formula: FV = P × [((1 + r)^n − 1) / r] × (1 + r), where P is your monthly contribution, r is the annual return divided by 12, and n is the total number of months. For example, 500 per month at 12% annual return over 10 years grows to roughly 116,000, of which 60,000 is invested capital.
What is the difference between SIP and lump sum investing?
A SIP spreads your investment into fixed monthly amounts, while a lump sum puts the entire amount in at once. SIPs benefit from cost averaging and reduce the risk of investing everything at a market peak, whereas a lump sum can outperform when markets rise steadily. This calculator models the SIP approach with recurring monthly contributions.
Can I lose money in a SIP?
Yes. A SIP is only a method of investing regularly; the underlying asset, such as an equity mutual fund, can fall in value. Over short periods your portfolio may show a loss, but consistent long-term SIPs historically smooth out volatility through cost averaging. Returns are never guaranteed and depend on the fund you choose.
What return rate should I assume for a SIP calculation?
Equity mutual funds have historically delivered roughly 10% to 12% annual returns over long horizons, while debt funds typically return 6% to 8%. These are averages, not guarantees, so it is wise to run the calculator with a conservative and an optimistic rate to see a realistic range. Past performance does not predict future results.
Does increasing the SIP amount or the duration matter more?
Time usually has the bigger impact because compounding accelerates in the later years. Extending the horizon by a few years often adds more to the final value than a modest increase in the monthly amount, since early contributions have longer to grow. Starting sooner is one of the most powerful levers for building wealth.