SIP Calculator

What Is a SIP?

A systematic investment plan (SIP) is a way of investing in a mutual fund through a fixed amount every month instead of one large payment. The amount is debited from your bank account on a chosen date and buys units of the fund at that day's net asset value (NAV). When prices are low your installment buys more units, and when they are high it buys fewer, a pattern known as rupee cost averaging.

Most Indian fund houses accept SIPs from as little as a few hundred rupees a month, and you can pause, stop or change the amount. A SIP is a payment method, not a product: the returns come entirely from the fund you choose, whether equity, debt, hybrid or an ELSS tax-saving fund.

How to Use This Mutual Fund Calculator

Enter your monthly investment, the annual return you expect and how many years you plan to invest. The calculator shows the estimated maturity value, how much you put in, and the gain, along with a year-by-year table. For a one-time investment, use the lumpsum calculator below; to plan regular income from an existing corpus, use the SWP calculator.

The expected return is an assumption, not a promise. Equity mutual fund returns vary from year to year and can be negative over short periods. Try a range of rates, such as 8%, 10% and 12%, to see how sensitive the result is.

SIP Formula and Example

This calculator follows the convention used by most Indian SIP calculators: the annual return is divided by 12 to get a monthly rate, and each installment is invested at the start of the month. With the defaults of ₹5,000 a month at 12% for 10 years, i = 0.01 and n = 120. Then (1.01)¹²⁰ = 3.3004, so M = 5,000 × (3.3004 − 1) ÷ 0.01 × 1.01 ≈ ₹11,61,695.

You invest ₹6,00,000 in total, and the estimated returns are about ₹5,61,695. Notice that returns make up nearly half the final value after 10 years; stretch the period to 20 years and they account for most of it.

M = P × [(1 + i)ⁿ − 1] ÷ i × (1 + i)

M

maturity value

P

monthly SIP installment

i

monthly rate: expected annual return ÷ 12 ÷ 100

n

number of monthly installments

The final (1 + i) factor reflects installments invested at the start of each month, so every installment earns at least one month of returns.

Lumpsum, SWP and ELSS

A lumpsum investment puts the whole amount in at once. If markets rise afterward it beats a SIP of the same total, because all the money is invested from day one; if markets fall soon after, a SIP softens the blow. The lumpsum calculator compounds once a year: ₹1,00,000 at 12% for 10 years grows to about ₹3,10,585.

An SWP reverses a SIP: you redeem a fixed amount each month from a fund, which suits retirees who want a monthly income. If the withdrawal is larger than what the fund earns, the balance shrinks and eventually runs out; the SWP calculator shows when.

ELSS (equity-linked savings scheme) funds can be bought through a SIP like any other fund. Investments qualify for a deduction under Section 80C of the Income Tax Act under the old tax regime, and each installment carries its own three-year lock-in, so the last SIP installment unlocks three years after it was made.

Tips for SIP Investors

• Start early. Time in the market does more than the installment size: ₹5,000 a month for 20 years at 12% grows to about ₹50 lakh, more than four times the 10-year figure.
• Raise the SIP with your income. A yearly step-up keeps your savings rate in line with your salary.
• Match the fund to the goal. Equity funds suit goals five or more years away; debt funds suit shorter horizons.
• Check the expense ratio. Direct plans charge less than regular plans, and the difference compounds over time.
• Do not stop SIPs in a falling market. Lower NAVs mean each installment buys more units.

Frequently asked questions

Sources

• SEBI – Securities and Exchange Board of India
• AMFI – Association of Mutual Funds in India
• Income Tax Department, Government of India