SIP calculator
A systematic investment plan, or SIP, puts a fixed amount into a mutual fund every month. This calculator estimates what those monthly investments could grow to at the return you assume, and shows how much of the final value came from you and how much from growth.
Uses a standard published formula, explained below. Everything is calculated in your browser, and nothing you enter is sent to a server. This is not financial advice.
Your plan
Estimated final corpus
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Total invested
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Estimated returns
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Returns as % of invested
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Show the working
The future value of an annuity, with your figures substituted in:
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How to use this calculator
- Invested each month: your fixed monthly amount. Most plans let you increase it later, but the calculator assumes it stays the same.
- Expected annual return: your own assumption, not a promise. Be cautious here, because a rate taken from an unusually good decade will make the result look much better than it is likely to be.
- Duration: how long you keep investing, in years or months.
The SIP formula
A SIP is calculated as the future value of a series of equal monthly payments:
FV = P × (((1 + r)n − 1) / r) × (1 + r)
P is the monthly amount, r is the monthly rate of return and n is the number of months. The final (1 + r) assumes each payment is made at the start of the month, which matches how most plans collect the money.
Why growth eventually overtakes what you put in
Look at the chart. In the early years, the amount you invested makes up almost all of the value, because there is not yet much money for the market to grow. In a long plan, the two lines meet somewhere in the middle, and after that the growth adds more each year than you do.
When that happens depends mostly on how long you invest. Over ten years at a moderate return, most of the final value is money you paid in. Over twenty-five years, most of it is growth. That is why investing for longer matters more than investing more: doubling the monthly amount doubles the result, but doubling the time does much more than that.
The big assumption behind the result
The result depends entirely on the return you entered, and the calculator applies that return evenly every month. Real markets do not behave like that. They rise in irregular bursts with flat and falling periods in between, and the order of good and bad years affects your result even when the average is the same.
This is called sequence risk. It matters most near the end of a long plan, when your balance is largest and a bad year takes away more money than several good early years added. A smooth projection cannot show this, so treat the result as the middle of a wide range, not a target.
Investing a fixed amount every month does help with timing. The same amount buys more units when prices are low and fewer when they are high, so your average purchase price ends up lower than the average market price. That benefit is real, and it holds whether or not your assumed return turns out to be right.
What the result does not include
- Fund management fees, which compound against you just as returns compound for you. A 1.5% yearly charge over twenty-five years takes a large share of the final value.
- Exit loads, which some funds charge if you sell within a set period.
- Tax on your gains when you sell.
- Inflation, which means the final amount will buy much less than the same amount buys today.
Not financial advice and not a forecast. This is arithmetic based on an assumption you entered. Market investments can lose value, past returns do not predict future returns, and no return is guaranteed. Speak to a licensed adviser before you invest.
Frequently asked questions
What is a SIP?
A SIP, or systematic investment plan, is a way of investing a fixed amount at regular intervals, usually every month, into a mutual fund. Its main benefits are automation and consistency rather than any special feature of the fund.
Is a SIP safe?
A SIP does not reduce market risk by itself. Your money is invested in whatever the fund holds, and equity funds can fall in value. What regular investing reduces is the risk of putting all your money in at a bad time.
What rate of return should I assume?
Choose a rate lower than the best historical decade you can find. Use a long-term average for the type of fund, subtract its fees and try the calculator with both a cautious and a hopeful rate to see the range of outcomes.
Is a SIP better than a lump sum?
If you already have the money and the market rises afterwards, a lump sum usually does better because it is invested for longer. Monthly investing does better if prices fall early on. Since nobody knows which will happen, most people simply invest money as they earn it.
Can I stop or change my SIP?
Usually yes. Most plans let you pause, increase or cancel your SIP. Check whether the fund charges an exit load on units sold within a minimum holding period, which is often one year.
Does the result include tax and fees?
No. Fund fees and tax on gains both reduce your real result, and fees compound over the whole period. Subtract the fund's expense ratio from your assumed return for a closer estimate.