SIP Calculator

How a SIP Calculator Works

A Systematic Investment Plan, or SIP, is simply a way of investing a fixed amount into a mutual fund at regular intervals — almost always once a month. Instead of trying to invest a large sum at the "right" moment, you commit to a steady monthly amount and let time and compounding do the heavy lifting. This SIP calculator turns that idea into a concrete number: it projects what your monthly contributions could be worth at the end of your chosen time horizon.

The projection uses the standard future-value-of-an-annuity formula. If P is your monthly investment, i is the monthly rate of return (your expected annual return divided by 12 and by 100), and n is the total number of monthly instalments, then the future value is:

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

The final (1 + i) term reflects that each instalment is assumed to be invested at the start of the month, so it earns a full month of growth. The calculator adds up every instalment's compounded value to give your Total Value, then subtracts what you actually put in (Invested Amount) to show your Estimated Returns.

A worked example

Suppose you invest ₹5,000 every month for 15 years and expect a 12% annual return. Over 180 months you contribute ₹9,00,000 of your own money. Thanks to compounding, the projected total value is roughly ₹25.2 lakh — meaning your estimated returns of about ₹16.2 lakh are nearly double what you invested. The longer the horizon, the more dramatic this gap becomes, because returns in the early years themselves start earning returns.

Why compounding rewards patience

The single biggest driver of SIP outcomes is time. In the first few years, most of your total value is simply the money you have deposited. But as the years pass, the "returns on returns" effect accelerates, and eventually the growth in a single year can exceed your entire annual contribution. This is why financial planners stress starting early: a SIP begun at 25 has a very different outcome from the same SIP begun at 40, even if the monthly amount is identical. The year-by-year growth table above makes this visible — watch how the "Est. Returns" column starts small and then overtakes the "Invested" column.

Step-up SIPs

Most people's incomes rise over time, so keeping your SIP fixed for decades leaves growth on the table. A step-up SIP (also called a top-up SIP) raises your monthly contribution by a set percentage each year. Enter a step-up of, say, 10% and a ₹5,000 SIP becomes ₹5,500 in year two, ₹6,050 in year three, and so on. Because the larger contributions land in the later, higher-compounding years, even a small step-up can lift your final corpus substantially compared with a flat SIP — often by a third or more over a long horizon. Try toggling the step-up field to see the difference for your own numbers.

SIP versus lump-sum investing

A common question is whether to invest gradually through a SIP or all at once as a lump sum. A SIP spreads your entry across many market levels, a behaviour known as rupee-cost averaging: you automatically buy more units when prices are low and fewer when prices are high, and you never have to guess the perfect entry point. That makes SIPs a natural fit for investing out of a monthly salary. A lump sum, by contrast, puts your whole amount to work immediately, so it can out-perform when markets rise steadily after you invest. In practice the two are not rivals — many investors deploy a lump sum for money they already hold and run a SIP for their ongoing savings.

What this calculator does not include

To keep the projection clear, the calculator assumes a single, constant expected return for every year. Real markets do not behave that way: returns swing from year to year and can be negative, especially over short periods. The figures are also gross — they do not subtract a fund's expense ratio or any capital-gains tax you may owe when you redeem. A simple way to make the estimate more realistic is to enter an expected return that already nets off the fund's expense ratio. Use the output as a planning guide, not a guarantee, and revisit it as your goals and contributions change.

Using your results

Start with a goal — a house deposit, a child's education, retirement — and a rough time horizon. Adjust the monthly amount until the projected total value meets your goal, then sanity-check whether that monthly figure fits your budget. If it doesn't, a longer horizon or a modest annual step-up can close the gap without straining today's cash flow. You can download the full year-by-year growth table as a CSV to keep a record or to compare different scenarios side by side.