SIP Calculator
This SIP Calculator helps you estimate the future value of your investments made through a Systematic Investment Plan (SIP). It shows the expected maturity amount, total invested value, and total gains based on your monthly contribution, expected return rate, and investment duration.
You can also include an optional initial lump sum investment along with your monthly SIP to understand how both components grow together over time through compounding.
How SIP Return Calculation Works
A SIP return calculation estimates how your periodic investments grow over time assuming a constant rate of return and regular monthly contributions. Unlike a one-time investment, SIPs benefit from disciplined investing and compounding over long periods.
In this calculator, SIP contributions are treated as investments made at the beginning of each month. This approach reflects how SIP instalments are typically invested in real-world scenarios and slightly increases the effective compounding benefit compared to end-of-month investments.
Any initial lump sum amount is compounded monthly for the full investment duration, while monthly SIP contributions compound based on when they are invested during the tenure.
The calculation assumes a constant annual return rate with monthly compounding. Taxes, exit loads, expense ratios, and market volatility are not considered, and final values are rounded to the nearest rupee.
Inputs and Options Explained
The calculator allows you to control the primary variables that influence long-term investment growth.
- Initial Investment (₹): An optional lump sum amount invested at the start, compounded for the entire duration.
- Monthly SIP Amount (₹): The fixed amount invested every month through SIP.
- Expected Annual Return (%): The assumed annual rate of return, applied with monthly compounding.
- Investment Duration: The total investment period, selectable in years or months.
Examples and Edge Cases
Longer investment durations have a disproportionate impact on SIP outcomes due to the effect of compounding. Even modest monthly contributions can grow into a significant corpus when invested consistently over long periods.
Increasing the expected return rate or extending the investment duration can substantially raise the final maturity value, while higher monthly contributions directly increase both the invested amount and potential gains.
If the expected return rate is close to zero, the maturity value will be approximately equal to the total invested amount, as no meaningful compounding occurs in such scenarios.
Who Should Use This Tool
This tool is useful for individuals planning long-term wealth creation through disciplined monthly investing. It helps investors visualize how small, regular investments can grow over time.
First-time investors, salaried professionals, and anyone planning goals such as retirement, education, or large future expenses can use this calculator to set realistic expectations and investment targets.
Related Concepts
A SIP is a method of investing a fixed amount at regular intervals rather than a separate investment product. The total invested value represents the sum of all contributions, while gains reflect the difference between the maturity value and the invested amount. Compounding refers to earning returns on both the invested capital and previously earned returns.
To compare SIP-based investing with one-time investments, you can also explore the Lumpsum Calculator or evaluate long-term performance using the CAGR Calculator.