SIP Calculator

A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund every month. This calculator projects your maturity value using the same future-value-of-annuity-due formula used by AMCs and platforms like Groww and Kotak Mutual Fund.

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What is the SIP Calculator?

A Systematic Investment Plan (SIP) is a method of investing a fixed sum in a mutual fund at regular intervals — usually monthly — rather than as a single lump sum. Each instalment buys fund units at that day's price, so you accumulate more units when markets are low and fewer when they're high. Over time this smooths out your average purchase cost, a benefit known as rupee-cost averaging.

SIPs are popular because they make investing automatic and disciplined, work with small amounts (from ₹500/month), and harness compounding over the long term.

How to Calculate

A SIP's maturity value is calculated using the future value of an annuity-due, because each monthly instalment compounds for a different length of time. The steps are:

Convert the expected annual return into a monthly rate by compounding: i = (1 + annual return)^1/12 − 1. Do not simply divide by 12 — that overstates the result.
Find the total number of instalments: n = years × 12.
Apply the formula M = P × [((1+i)ⁿ − 1) / i] × (1+i).

The calculator does all of this instantly and also shows a year-by-year breakdown so you can see how the corpus builds.

Formula

The maturity value of a SIP is calculated as:

M = P × [ ((1+i)ⁿ − 1) / i ] × (1+i)

M — maturity amount
P — amount invested each month
n — total number of instalments (years × 12)
i — the monthly rate of return

The monthly rate must come from proper compounding, not naive division: i = (1 + annual return)^1/12 − 1. Dividing the annual rate by 12 understates true compounding and won't match what your mutual fund statement shows.

Worked Examples

Example 1 u2014 A 10-year SIP

₹5,000/month for 10 years at 12%: total invested ₹6,00,000, maturity ≈ ₹11,61,700 u2014 the returns nearly match what you put in.

Example 2 u2014 Starting early vs. late

₹5,000/month at 12% for 20 years grows to about ₹49.5 lakh, versus ₹11.6 lakh over 10 years. Doubling the duration produces far more than double the corpus u2014 the extra decade compounds on a much larger base.

Example 3 u2014 A larger instalment

₹10,000/month for 15 years at 12% reaches roughly ₹50 lakh, of which about ₹32 lakh is wealth gained on ₹18 lakh invested.

Definitions

Monthly Investment: The fixed amount you invest every month into the fund.
Expected Annual Return: Your assumption for the fund's yearly return. Equity funds are commonly modelled at 10–12% long term, but returns are market-linked and not guaranteed.
Investment Duration: How many years you stay invested. Longer durations benefit disproportionately from compounding.
Maturity Value: The estimated total value of your investment at the end of the duration — your contributions plus the returns earned on them.

How to Use

Enter how much you plan to invest every month.
Enter the annual return you expect the fund to deliver (12% is a common long-term equity mutual fund assumption, but this varies by fund category).
Enter how many years you plan to stay invested.
Read the maturity value, invested amount, and wealth gained instantly u2014 no submit button needed.
Use Save (if logged in) to track this projection against your actual SIP later.

Frequently Asked Questions

Is the SIP return guaranteed?

No. Mutual fund returns are market-linked and not guaranteed. The expected annual return you enter is an assumption, not a promise u2014 use a conservative figure for long-term equity funds (typically 10-12%) and a lower one for debt funds.

Why does this calculator compound monthly instead of just dividing the annual rate by 12?

Dividing by 12 (e.g. 12%/12 = 1%/month) overstates the effective annual return once compounded back up. This calculator instead derives the monthly rate so that compounding it for 12 months reproduces your exact annual return u2014 matching how AMCs report SIP projections.

What's a realistic return assumption for SIP planning?

This depends entirely on the fund category and market conditions u2014 equity funds are volatile and can swing well above or below any long-term average in a given year. Use this calculator to compare scenarios, not as investment advice.

Can I use this for a Step-Up SIP (where I increase my instalment every year)?

Not directly u2014 this calculator assumes a flat monthly instalment throughout. A Step-Up SIP needs a year-by-year simulation since the instalment amount changes annually; that's a separate calculator.

Does this account for expense ratio or exit load?

No u2014 the expected return you enter should already be your assumption for net returns after fund expenses. Exit load (if you redeem early) is not modelled here.