SIP Calculator

What Is a SIP Calculator?

A SIP (Systematic Investment Plan) calculator helps you estimate the future value of your mutual fund investments when you invest a fixed amount every month. Instead of trying to time the market, SIPs let you invest small amounts regularly — averaging your purchase price over time.

How the SIP formula works: Future Value = P × {[(1 + r)^n - 1] / r} × (1 + r), where P = monthly investment amount, r = monthly rate of return (annual rate ÷ 12 ÷ 100), n = number of months.

For example, a ₹5,000/month SIP at 12% annual returns for 10 years gives a corpus of approximately ₹11.6 lakh on an investment of ₹6 lakh — a gain of ₹5.6 lakh purely from compounding.

SIP vs Lump Sum — Which Is Better?

For most salaried individuals in India, SIP is better than lump sum investing for these reasons:

• Rupee Cost Averaging: You buy more units when markets fall and fewer when they rise — automatically lowering your average cost
• Discipline: Auto-debit from your bank account removes the temptation to skip investments
• No timing risk: You don't need to predict market highs and lows
• Accessible: Start with as little as ₹500/month on most platforms (Groww, Zerodha Coin, Paytm Money)

Lump sum investing is better when you have a large windfall (bonus, inheritance) and markets are at a historic low — but this requires market timing skill most investors don't have.

Expected SIP Returns in India (Realistic)

• Large Cap Mutual Funds: 10–13% annual returns (historical 10-year average)
• Mid Cap Funds: 12–16% (higher risk, higher reward)
• Small Cap Funds: 14–18% (highest risk, volatile short-term)
• Index Funds (Nifty 50): 11–13% (low cost, consistent)
• Debt Funds: 6–8% (low risk, suitable for goals under 3 years)

Use 10–12% as a conservative estimate for equity SIPs in this calculator. Do not use 15%+ as a base assumption — it leads to overconfidence.

Frequently Asked Questions

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