SIP Calculator

A systematic investment plan puts a fixed amount to work every month, so each instalment compounds for a different length of time. This calculator handles that staircase of contributions and shows how much of the final corpus is your money versus growth.

Inputs

Monthly investment

Expected return(% p.a.)

Years

Result

2,323,390.76

Invested 1,200,000 · Estimated returns 1,123,390.76

Visual breakdown

How it works

FV = M × [((1+i)^n − 1) / i] × (1+i)

How the sip calculator works

Future value of a monthly SIP = M × [((1 + i)^n − 1) ÷ i] × (1 + i), where M is the monthly amount, i the monthly return (annual ÷ 12), and n the number of instalments.

The trailing (1 + i) assumes each instalment is invested at the start of the month. Total invested is simply M × n, so growth = future value − M × n.

The first instalment compounds for the whole horizon and the last for a single month, which is why extending a SIP by a few years changes the corpus so dramatically.

Worked example: 10,000 a month for 15 years at 12%

i = 12 ÷ 1,200 = 0.01, n = 180.
(1.01)^180 ≈ 5.996, so ((5.996 − 1) ÷ 0.01) × 1.01 ≈ 504.6.
Future value ≈ 10,000 × 504.6 = 5,046,000.
Total invested = 10,000 × 180 = 1,800,000, so about 3,246,000 is growth — nearly two-thirds of the corpus.
Run the same SIP for 20 years and the corpus roughly doubles to about 9,990,000 on only 600,000 more invested.

Common mistakes to avoid

Treating the assumed return as a promise

Equity returns are not delivered in smooth monthly instalments. Model a pessimistic case as well; a 12% assumption dropping to 9% cuts the example corpus by roughly a third.

Forgetting to step up contributions

A flat SIP loses ground to inflation. Raising the amount 10% a year typically adds more to the corpus than chasing an extra percentage point of return.

Stopping during drawdowns

Pausing a SIP in a falling market removes the instalments that buy the most units, which is the mechanism that makes averaging work in the first place.

Frequently asked questions

Is SIP better than a lump-sum investment?

A lump sum wins mathematically when markets rise steadily, because the money is invested longer. SIP wins on behaviour and on volatile markets, since it removes timing decisions.

What return should I assume for a SIP?

Use a range rather than a point estimate — commonly 10–12% for diversified equity over long horizons, 6–8% for hybrid funds. Always check the projection against a lower figure.