SIP Calculator

Calculate returns from a Systematic Investment Plan (SIP). See how regular monthly investments grow over time through the power of compounding.

SIP Details

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Enter your SIP details and click "Calculate" to see your projected returns.

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Pro Tip

Increase your SIP by 10% each year as your income grows. A $500 SIP growing at 10% annually with 12% returns for 15 years yields ~$390,000 vs ~$253,000 with a fixed SIP.

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Understanding SIP (Systematic Investment Plan)

A Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly in a mutual fund or other investment vehicle. Instead of investing a lump sum, you invest a consistent amount each month, taking advantage of rupee/dollar cost averaging and the power of compounding.

SIPs reduce the risk of market timing. By investing consistently, you buy more units when prices are low and fewer when prices are high. Over time, this averages out the cost per unit and reduces the impact of short-term market volatility on your investment.

The power of SIP comes from consistency and compounding. Even small monthly investments can grow into substantial wealth over long periods. The wealth gain ratio shows how many times your money has multiplied relative to what you invested.

SIPs are particularly effective for long-term goals like retirement, children's education, or building an emergency fund. Starting early, even with a small amount, is more powerful than starting late with a larger amount due to the exponential nature of compound growth.

SIP Future Value Formula

FV = P × [(1+r)n − 1] / r × (1+r)

Where:

FV = Future value of SIP

P = Monthly SIP amount

r = Monthly rate of return (annual rate / 12)

n = Total number of months

Example

$500/month SIP at 12% annual return for 15 years:

  • • Monthly rate: 12% / 12 = 1% = 0.01
  • • Total months: 15 x 12 = 180
  • • FV = $500 x [(1.01)^180 - 1] / 0.01 x (1.01)
  • • Total value: ~$252,687
  • • Total invested: $90,000
  • • Wealth gain ratio: 2.81x

Frequently Asked Questions

What is dollar-cost averaging?
Dollar-cost averaging (DCA) means investing a fixed amount at regular intervals regardless of market conditions. This automatically buys more shares when prices are low and fewer when high, reducing the average cost per share over time.
What return should I expect from a SIP?
Returns depend on the investment vehicle. Equity mutual funds have historically returned 10-15% annually over long periods, while balanced funds may return 8-12%. Past returns do not guarantee future results; use conservative estimates for planning.
Can I change my SIP amount over time?
Yes, many investors use a step-up SIP strategy, increasing their investment amount annually (often by 5-10%). This accounts for salary growth and significantly boosts final corpus compared to a fixed SIP.
Is SIP better than lump sum investing?
SIP reduces timing risk and is more practical for salaried individuals. However, lump sum investing outperforms SIP about two-thirds of the time in rising markets. SIP is generally recommended for its disciplined approach and risk management.
What is the wealth gain ratio?
The wealth gain ratio is the total corpus divided by total investment. A ratio of 3x means your money tripled. Higher ratios indicate better compounding effects, usually achieved through higher returns or longer investment periods.