SIP calculator
A systematic investment plan puts a fixed amount into the market every month. This works out what those instalments become at an assumed rate of return, and separates what you contributed from what the market added.
Built and checked by Mubashir, who works in accounting and finance. Formula and sources shown below. Not financial advice.
Your plan
Estimated final corpus
—
Total invested
—
Estimated returns
—
Returns as % of invested
—
Show the working
The future value of an annuity, with your figures substituted in:
—
How to use this calculator
- Invested each month — the fixed instalment. Most plans allow this to be increased later; the calculator assumes it stays flat.
- Expected annual return — your assumption, not a promise. Be conservative here. A rate you pulled from a good decade will flatter the result badly.
- Duration — how long you keep contributing.
The formula
Regular investing is the future value of an annuity:
FV = P × (((1 + r)n − 1) / r) × (1 + r)
P is the monthly instalment, r is the monthly rate, and n is the number of instalments. The final term treats each deposit as made at the start of the month rather than the end, which matches how most plans actually debit.
Why the returns overtake the contributions
Look at the chart. In the early years the invested band dominates and the returns band is barely visible, because there is little accumulated capital for the market to grow. The two converge somewhere in the middle of a long plan, and after that the returns band grows faster than you can contribute.
Where that crossover falls depends almost entirely on duration. Over ten years at a moderate rate, most of your corpus is money you deposited. Over twenty-five, most of it is not. This is the whole argument for length over amount — doubling the monthly instalment doubles the outcome, while doubling the duration does considerably more than that.
The assumption that does the heavy lifting
Everything above depends on the rate you entered, and this calculator applies it evenly to every single month. Real markets do not work that way. They deliver their returns in irregular bursts separated by flat and falling periods, and the order in which those arrive changes your outcome even when the average is identical.
This is called sequence risk, and it matters most near the end of a long plan, when the corpus is largest and a bad year removes more in absolute terms than several good early years added. A smooth projection cannot show you this. Treat the output as the centre of a wide range rather than a target.
Averaging into the market monthly does help with the related problem of timing. Because a fixed sum buys more units when prices are low and fewer when high, your average purchase price ends up below the average market price over the period. That is a real and durable benefit of instalment investing, and it is independent of whether your rate assumption turns out to be right.
What is not included
Fund management fees, which compound against you exactly as returns compound for you — a 1.5% annual charge over twenty-five years consumes a substantial share of the final corpus. Exit loads on early withdrawal. Capital gains tax at redemption. And inflation, which means the final figure buys considerably less than the same number does today.
Not financial advice, and not a forecast. This is arithmetic on an assumption you supplied. Market investments can lose value, past performance does not indicate future results, and no return is guaranteed. Speak to a licensed adviser before investing.
Frequently asked questions
What is a SIP?
A systematic investment plan: a fixed amount invested at regular intervals, usually monthly, into a fund. The mechanism is automation and consistency rather than any special product feature.
Is a SIP safe?
The instalment structure is not itself a risk reducer. Your money is exposed to whatever the underlying fund holds, and equity funds can and do fall. What regular investing reduces is timing risk, not market risk.
What return rate should I assume?
Lower than the best historical decade you can find. Use a long-run average for the asset class, subtract fees, and consider running the calculator twice with an optimistic and a pessimistic figure to see the range.
SIP or a lump sum?
If you have the money now and the market subsequently rises, a lump sum wins arithmetically, because it spends more time invested. Instalments win when prices fall early. Since neither is knowable in advance, most people invest what they have as it arrives.
Can I stop or change my instalment?
Generally yes — most plans allow pausing, increasing or cancelling. Check for exit loads on units redeemed within a minimum holding period, which is commonly a year.
Does the result account for tax and fees?
No. Fund expense ratios and capital gains tax both reduce the real outcome, and expense ratios compound over the full duration. Subtract the expense ratio from your assumed return for a closer estimate.