What is a SIP?
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund at regular intervals, usually every month. Instead of timing the market with one large investment, you buy units steadily. When prices fall, your fixed amount buys more units; when they rise, it buys fewer. Over time this averages out your purchase cost, a benefit known as rupee cost averaging.
The real engine of a SIP is compounding. Returns earned in one year start earning returns of their own the next year. The longer you stay invested, the larger the share of your final amount that comes from growth rather than from what you put in.
How to use this SIP calculator
- Monthly investment: the amount you plan to invest every month.
- Expected return: the average yearly return you expect from the fund.
- Time period: how many years you will keep investing.
The results update instantly. You see the total amount you invested, the estimated returns and the final value, plus a year-by-year chart and table. The link in your browser's address bar updates too, so you can bookmark or share your exact plan.
SIP calculation formula
This calculator uses the standard formula for a series of monthly investments made at the start of each month:
- FV = future value (maturity amount)
- P = monthly SIP amount
- i = monthly rate of return, (1 + r)1/12 − 1, where r is the expected annual return
- n = number of monthly instalments (years × 12)
Why the monthly rate is not simply 12 ÷ 12
Mutual fund returns are reported as a compound annual growth rate (CAGR). A monthly rate of 1% compounds to 12.68% a year, which would overstate your returns. The rate that compounds to exactly 12% a year is about 0.949% a month, and that is what this calculator uses.
Worked example
Say you invest ₹10,000 a month for 10 years and expect 12% a year. The monthly rate is about 0.949% and there are 120 instalments. Plugging these in gives a future value of about ₹22,40,359. You invested ₹12,00,000, so roughly ₹10,40,359 is growth.
Why starting early matters
The table shows a ₹5,000 monthly SIP at 12% a year for different periods:
| Period | Invested | Estimated value |
|---|---|---|
| 10 years | ₹6,00,000 | ₹11,20,179 |
| 20 years | ₹12,00,000 | ₹45,99,287 |
| 30 years | ₹18,00,000 | ₹1,54,04,866 |
Going from 20 to 30 years adds only ₹6 lakh of investment but more than triples the final amount. The extra decade gives compounding the time it needs.
How the return rate changes the result
Small differences in return make a big difference over long periods. A ₹5,000 monthly SIP for 15 years grows to about ₹20.1 lakh at 10%, ₹23.8 lakh at 12% and ₹28.3 lakh at 14%. Because actual returns vary, it is sensible to plan with a conservative rate and treat anything more as a bonus.
Tips to get more from your SIP
- Increase it every year. Raising your SIP as your salary grows can double the final corpus. Try the step-up SIP calculator to see how much.
- Stay invested through falls. Market dips let your SIP buy more units cheaply.
- Choose direct plans. Direct plans have lower expense ratios than regular plans, which adds up over decades.
- Link each SIP to a goal. Retirement, a child's education or a house makes it easier to stay disciplined.
Things this calculator does not include
The result is before tax, exit loads and inflation. Gains from mutual funds are taxed as capital gains when you redeem, at rates that depend on the fund type and how long you held the units; the capital gains calculator works out that tax. To compare with a one-time investment, use the lumpsum calculator. To check how a fund actually performed, use the CAGR calculator.
Frequently asked questions
How is SIP return calculated?
SIP returns are calculated with the future value of an annuity formula: FV = P × [((1 + i)^n − 1) / i] × (1 + i), where P is the monthly amount, n is the number of instalments and i is the monthly rate that compounds to your expected annual return, i = (1 + r)^(1/12) − 1. Each instalment compounds for the months left until the end of the period.
Is the return shown by the SIP calculator guaranteed?
No. Mutual fund returns depend on market performance and change every year. The calculator assumes a steady average return, so treat the result as an estimate for planning, not a promise.
What return rate should I use for an equity SIP?
Many planners use 10–12% a year for diversified equity funds over long periods, 7–9% for hybrid funds and 6–7% for debt funds. Using a slightly lower rate than past returns gives a more cautious plan.
What is the minimum amount for a SIP?
Most mutual funds in India accept SIPs from ₹500 a month, and some allow ₹100. The calculator starts at ₹500.
Can I stop or change my SIP later?
Yes. Open-ended mutual fund SIPs can be paused, stopped or changed at any time without penalty, although an exit load may apply if you redeem units within a short period, usually one year for equity funds.
Is SIP better than a lumpsum investment?
A SIP spreads your purchases over time, which reduces the risk of investing everything at a market high and suits a monthly salary. A lumpsum can earn more when markets rise steadily after you invest. Many investors use both.
Sources
- AMFI – Association of Mutual Funds in India (investor corner)
- SEBI – Securities and Exchange Board of India
Last updated 19 September 2026. Results are estimates for planning only and are not investment, tax or legal advice. See our disclaimer.