SIP Calculator
Calculate the future value of your Systematic Investment Plan (SIP) investments.
What is SIP?
SIP stands for Systematic Investment Plan. It is a method of investing a fixed amount regularly (usually monthly) in mutual funds. SIP allows you to invest in a disciplined manner without worrying about market timing.
The biggest advantage of SIP is rupee cost averaging — when markets are down, you buy more units, and when markets are up, you buy fewer units. Over time, this averages out your cost per unit and reduces the impact of market volatility.
Combined with the power of compounding, even small monthly investments can grow into a substantial corpus over long periods.
SIP Formula
Where:
- M = Maturity Amount (Future Value)
- P = Monthly SIP Investment Amount
- r = Monthly Rate of Return = Annual Return / 12 / 100
- n = Total Number of Months (Years × 12)
💡 Note: This formula assumes returns are compounded monthly and investments are made at the beginning of each month. Actual mutual fund returns vary and are not guaranteed.
Example Calculation
Scenario
You invest ₹10,000 per month in a mutual fund SIP with an expected annual return of 12% for 10 years.
Step-by-Step Solution
r = 12 / 12 / 100 = 0.01
n = 10 × 12 = 120 months
M = 10,000 × [{(1.01)120 – 1} / 0.01] × (1.01)
M = ₹23,23,391
Frequently Asked Questions
Most mutual funds allow SIP investments starting from as low as ₹500 per month. Some funds may have a minimum of ₹1,000 or ₹5,000. You can choose an amount that fits your budget and increase it over time.
Yes! SIPs are completely flexible. You can increase, decrease, pause, or stop your SIP at any time without any penalty. You can also switch between funds if needed.
No, SIP in mutual funds carries market risk. The returns are not guaranteed and depend on market performance. However, SIP reduces risk through rupee cost averaging and is less risky than lump-sum investing. For long-term goals (5+ years), equity SIPs have historically given good returns.
SIP is better for regular income earners who want to invest gradually and reduce timing risk. Lump Sum is suitable when you have a large amount and markets are at low levels. Historically, for volatile markets, SIP tends to perform better for most investors.
A Step-up SIP (or Top-up SIP) allows you to increase your SIP amount periodically (e.g., by 10% every year). This helps you invest more as your income grows, significantly boosting your final corpus compared to a regular SIP.
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