SIP Calculator
Estimate how much wealth you can build through monthly SIP investments. This calculator shows the future value of your SIP based on expected returns and time period. Understand long-term compounding and plan systematic investments smarter.
How SIP Calculator Works
A SIP Calculator is a financial planning tool that helps investors estimate the future value of their systematic investments in mutual funds. SIP stands for Systematic Investment Plan, where a fixed amount is invested every month. In India, SIP is one of the most popular investment options because it promotes financial discipline, reduces market timing risk, and benefits from long-term compounding. When you invest through SIP, each monthly contribution earns returns based on the expected annual rate. Over time, these returns also earn returns, creating the power of compounding. The longer your investment duration, the higher the potential growth. This SIP Calculator allows you to calculate total invested amount, estimated returns, and final maturity value. It is ideal for long-term goals like retirement, education, and wealth creation.
Future Value = P × [(1 + r)^n – 1] / r × (1 + r)
- P = Monthly SIP investment amount
- r = Monthly rate of return (annual rate ÷ 12 ÷ 100)
- n = Total number of months
- Each monthly investment compounds until maturity
FAQ
How does a SIP calculator estimate the future value of investments?
A SIP calculator uses the compound interest formula to compute the future value of monthly investments. It considers your monthly contribution, expected annual returns, and investment duration. This helps you understand how consistent SIP investing builds long-term wealth through compounding.
Is SIP better than lump sum investment?
SIP is ideal for averaging out market fluctuations because you invest periodically. It reduces market timing risk and suits beginners who want disciplined investing. Lump sum works better when markets are undervalued and you have large capital available.
How much return can I expect from SIP investments?
SIP returns depend on market performance, fund type, and investment duration. Historically, equity SIPs deliver 10–14% annualized returns over long periods. The longer you stay invested, the greater the compounding impact on your overall returns.
Can I increase or decrease my SIP amount over time?
Yes, SIPs are flexible. You can increase your SIP amount through a top-up SIP or reduce it based on your financial situation. Adjusting SIP contributions helps align long-term goals like retirement, education, or wealth creation.
Is SIP safe for long-term financial goals?
SIP is considered one of the most stable long-term wealth-building strategies. By investing monthly, you benefit from rupee cost averaging and compound returns. Over 5–10 years, SIPs can outperform many traditional investment options.