SIP Calculator
Calculate the future value of your monthly Systematic Investment Plan (SIP) investments and see the power of compounding in action.
Total Maturity Value
Total Invested
Est. Returns
Smart Insight
Increasing your SIP by just 10% could grow your corpus to ₹16,87,163.
Growth of Investment Over Time
Yearly Growth Schedule
| Year | Invested | Returns | Total Value |
|---|---|---|---|
| 1 | ₹60,000 | +₹4,047 | ₹64,047 |
| 2 | ₹1,20,000 | +₹16,216 | ₹1,36,216 |
| 3 | ₹1,80,000 | +₹37,538 | ₹2,17,538 |
| 4 | ₹2,40,000 | +₹69,174 | ₹3,09,174 |
| 5 | ₹3,00,000 | +₹1,12,432 | ₹4,12,432 |
| 6 | ₹3,60,000 | +₹1,68,785 | ₹5,28,785 |
| 7 | ₹4,20,000 | +₹2,39,895 | ₹6,59,895 |
| 8 | ₹4,80,000 | +₹3,27,633 | ₹8,07,633 |
| 9 | ₹5,40,000 | +₹4,34,108 | ₹9,74,108 |
| 10 | ₹6,00,000 | +₹5,61,695 | ₹11,61,695 |
Understanding Systematic Investment Plan (SIP)
A Systematic Investment Plan (SIP) is a smart and hassle-free mode for investing money in mutual funds. SIP allows you to invest a fixed amount of money at regular intervals (monthly, quarterly, or semi-annually) in your chosen mutual fund scheme.
Benefits of SIP
- •Disciplined Investing: Encourages a regular saving habit.
- •Rupee Cost Averaging: Buy more units when prices are low and fewer when prices are high.
- •Power of Compounding: Small investments over a long period can grow into a significant corpus.
- •Flexibility: Start, stop, or skip SIPs at your convenience.
How SIP Works
When you start an SIP, a fixed amount is debited from your bank account periodically and invested in a specific mutual fund. You are allocated units based on the current Net Asset Value (NAV) of the fund. Over time, as you continue to invest, the number of units accumulates, and the value of your investment grows based on the fund's performance.
How to use the SIP Calculator?
Using our SIP calculator is simple and intuitive. Follow these steps to estimate your wealth:
- Monthly Investment: Enter the amount you plan to invest every month.
- Expected Return Rate: Enter the annual return rate you expect from the fund (e.g., 12% for equity funds).
- Time Period: Select the number of years you want to stay invested.
- Review Results: Instantly see your total investment, estimated returns, and final maturity value.
SIP Returns Calculation Formula
The SIP returns are calculated using the Future Value (FV) formula for an annuity:
Where:
FV = Future Value (Maturity Amount)
P = Monthly Investment Amount
i = Monthly Interest Rate (Annual Rate / 12 / 100)
n = Total number of months (Years × 12)
SIP vs Lumpsum
While SIP allows you to invest small amounts regularly, a Lumpsum investment involves a one-time payment. SIP is generally preferred for its ability to mitigate market volatility through rupee cost averaging, whereas Lumpsum can be more profitable in a consistently rising market.
Taxation on SIP Returns
Returns from SIPs are subject to Capital Gains Tax. For Equity Mutual Funds:
- • STCG (Short Term): 20% if held for < 1 year.
- • LTCG (Long Term): 12.5% on gains above ₹1.25 Lakh if held for > 1 year.
SIP vs Other Investment Options
| Feature | SIP (Mutual Funds) | Recurring Deposit (RD) | Fixed Deposit (FD) |
|---|---|---|---|
| Returns | Market-linked (Higher potential) | Fixed (Lower) | Fixed (Lower) |
| Risk | Moderate to High | Very Low | Very Low |
| Taxation | Capital Gains Tax | Taxed as per Slab Rate | Taxed as per Slab Rate |
Common Myths about SIP
- X
Myth 1: SIP is only for small investors.
Fact: High Net-worth Individuals (HNIs) also use SIPs to invest large amounts systematically to avoid market timing risks. - X
Myth 2: You cannot change the SIP amount once started.
Fact: Most mutual funds allow you to increase (Step-up) or decrease your SIP amount at any time. - X
Myth 3: SIP is a separate product.
Fact: SIP is just a method of investing in a mutual fund, not a product itself.
Pro Tip for Investors
"The best time to start an SIP was yesterday. The second best time is today. The key to wealth creation through SIP is not timing the market, but time in the market."