How the SIP Calculator Works
This SIP calculator projects the future value of your monthly investments by compounding each installment at your expected annual rate of return, month over month, for the entire investment period. SIPs work on two principles: compounding, where staying invested longer lets returns build on themselves, and rupee cost averaging, where investing a fixed amount every month buys more units when prices dip and fewer when prices rise, smoothing out your average purchase cost over time.
Enter your monthly investment amount, the return rate you expect (equity mutual funds have historically delivered 10–14% annually over the long term, though this is not guaranteed), and how many years you plan to stay invested.
You can also add an optional annual step-up percentage — a common strategy where you increase your SIP amount every year, typically in line with your income growth, to build a larger corpus faster.
Benefits of a SIP
- Disciplined, automatic investing: a fixed amount is debited on a set date each month, so you invest consistently without having to time the market or remember to do it manually.
- Rupee cost averaging: investing the same amount every month buys more units when prices are low and fewer when prices are high, smoothing out your average purchase cost over time.
- Lower entry barrier: you can start with a small, manageable monthly amount instead of needing a large sum upfront, unlike a lumpsum investment.
- The power of compounding: staying invested longer lets your returns generate their own returns, so the growth curve gets steeper the longer you stay invested.
- Flexible and adjustable: you can increase your SIP amount over time with a step-up, pause it, or stop it without penalty, unlike some fixed-tenure investment products.
Formula Used
The calculator uses the standard future value of an annuity formula for a series of monthly investments, compounded monthly:
FV = P × [ ((1+i)^n − 1) / i ] × (1+i)- FVFuture value of your investment
- PMonthly investment amount
- iExpected monthly rate of return (annual rate ÷ 12)
- nTotal number of monthly installments
Example Calculation
Suppose you invest a fixed amount every month in an equity mutual fund for 10 years, expecting a 12% annual return.
- Monthly Investment₹10,000
- Expected Return Rate12% p.a.
- Investment Period10 years
- Total Value ≈ ₹23.23 Lakh (Invested: ₹12 Lakh, Returns: ₹11.23 Lakh)
Important Assumptions
- Returns are assumed to be compounded monthly at a constant rate through the entire tenure — actual mutual fund returns fluctuate and are never fixed.
- The SIP installment is assumed to be invested at the start of the month (annuity due).
- This calculator assumes the expected return rate is compounded monthly at a nominal rate (annual rate ÷ 12), consistent with how most mutual fund SIP calculators compute returns. Some calculators instead use the true effective annual compounding rate, which will show slightly lower projected returns for the same inputs.
- This calculator does not account for expense ratios, exit loads, or taxation on capital gains.
- Step-up SIP increases apply once every 12 months from the start date.
Frequently Asked Questions
Guides & Articles
SIP vs FD: Which Is Better for You in 2026?
A ₹10,000 monthly SIP at 12% can reach ₹99.91 lakh in 20 years, against ₹52.14 lakh in a 7% recurring deposit. But SIPs carry market risk and FDs do not. Here is how to choose, with returns, tax and a simple split by goal.
Retirement Planning at 40: A Complete Guide
A 40-year-old spending ₹50,000 a month needs about ₹4.26 crore at 60. Here is the monthly SIP to build it, what waiting five more years costs, and how savings, step-up SIP and retirement age change the number.
How Much SIP Is Needed for ₹2 Crore?
At 12% a year, about ₹20,017 a month for 20 years builds ₹2 crore. Here is the exact SIP amount for every time frame, how step-up SIP lowers it, and what ₹2 crore will really be worth after inflation.