SIP Calculator
Plan your wealth creation journey with our Systematic Investment Plan calculator.
Investment Parameters
SIP Returns Estimate
Visual growth of your ₹5,000/month SIP over 10 years at 12% p.a.
What is a SIP?
A Systematic Investment Plan (SIP) is an investment strategy offered by mutual funds to investors, allowing them to invest a fixed amount of money at regular intervals—typically monthly, quarterly, or yearly. Instead of making a large lump-sum investment, a SIP allows you to participate in the stock market with smaller, manageable amounts, making it ideal for retail investors.
How Does the SIP Calculator Work?
Our SIP Calculator is designed to give you a clear estimate of the future value of your investments based on the power of compounding. To use the tool, you need to input three simple parameters:
- Monthly Investment (₹): The fixed amount you plan to invest every month.
- Expected Annual Return (%): The estimated annualized return you expect from your mutual fund over the investment period. (Historically, Indian equity mutual funds have returned around 12% to 15% in the long term).
- Investment Period (Years): The total duration for which you plan to continue your SIP.
The SIP Calculation Formula
The calculator uses the compound interest formula to determine the future value of your monthly investments. The mathematical formula used is:
Where:
FV = Future Value of the investment
P = Regular monthly investment amount
r = Monthly rate of return (Annual Rate / 12 / 100)
n = Number of investment months (Years × 12)
Frequently Asked Questions (FAQs)
Is SIP better than a Lumpsum investment?
SIPs are generally considered safer for average investors because they average out the cost of investing through market volatility (Rupee Cost Averaging). Lumpsum investments require timing the market, which carries higher risk.
Can I stop my SIP anytime?
Yes, SIPs are highly flexible. You can pause, stop, or increase your SIP amount at any time without any penalties, provided the mutual fund doesn't have a strict lock-in period (like ELSS funds).
Are SIP returns guaranteed?
No, SIP returns are linked to the performance of the financial markets. The "Expected Return" used in calculators is an assumption based on historical data. Mutual fund investments are subject to market risks.