SIP stands for Systematic Investment Plan. It is a method of investing a fixed amount regularly (usually monthly) in mutual funds. SIP helps investors build wealth over time by taking advantage of rupee cost averaging and the power of compounding.

How does SIP compounding work?

In a SIP, each monthly instalment earns returns which are reinvested. Over time, you earn returns not just on your principal but also on the accumulated returns. This is called compounding. The longer you stay invested, the more powerful the compounding effect becomes.

What is the difference between SIP and lump sum investing?

In lump sum investing, you invest the entire amount at once, whereas in SIP you invest a fixed amount at regular intervals. SIP reduces the risk of market timing through rupee cost averaging — you buy more units when prices are low and fewer when prices are high. Lump sum can yield higher returns if invested at the right time, but SIP is generally considered less risky.

Can I stop my SIP anytime?

Yes, you can stop your SIP at any time without any penalty in most mutual fund schemes. You can also pause and restart your SIP. However, stopping early may reduce the benefits of compounding. It is generally advisable to continue your SIP for the planned duration to achieve your financial goals.

SIP Calculator – Systematic Investment Plan Returns

Monthly Investment (₹)

Expected Return (% p.a.)

Investment Period (years)

Total Invested

₹0

Estimated Returns

₹0

Future Value

₹0

What Is a SIP Calculator?

A Systematic Investment Plan (SIP) calculator helps you estimate the future value of your mutual fund investments made through regular monthly contributions. Instead of investing a lump sum, SIP allows you to invest a fixed amount every month, which takes advantage of rupee cost averaging and the power of compounding.

The calculator uses the standard SIP formula: FV = P × [((1 + r)ⁿ − 1) / r] × (1 + r), where P is the monthly investment, r is the monthly rate of return (annual rate divided by 12), and n is the total number of months. This formula accounts for each monthly instalment growing at the expected rate until the end of the investment period.

SIP is one of the most popular ways to invest in India because it instills financial discipline and reduces the risk of market timing. Whether you are saving for retirement, a child's education, or a home down payment, starting a SIP early lets compounding work in your favour. Use this calculator to experiment with different monthly amounts, return rates, and time horizons to find a plan that fits your financial goals. Remember that actual mutual fund returns can vary, so treat the results as estimates rather than guarantees.

Formula

FV = P × [((1 + r)ⁿ − 1) / r] × (1 + r)

Where:

FV = future value of the SIP investment
P = monthly SIP amount
r = monthly rate of return (annual rate ÷ 12)
n = total number of monthly instalments

Example Calculation

Scenario: ₹5,000 monthly SIP at 12% expected annual return for 10 years

Step 1: Monthly rate r = 12% ÷ 12 = 0.01
Step 2: Total instalments n = 10 × 12 = 120
Step 3: FV = ₹5,000 × [((1.01)¹²⁰ − 1) / 0.01] × (1.01)
Result: Future value = ₹11,61,695 | Total invested = ₹6,00,000 | Wealth gained = ₹5,61,695

Disclaimer: This calculator is for informational and educational purposes only. The results are based on hypothetical projections and do not guarantee actual mutual fund returns. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Consult a certified financial advisor for personalised investment advice.

SIP Calculator – Systematic Investment Plan Returns

What Is a SIP Calculator?

Formula

Example Calculation

Frequently Asked Questions

Related Calculators