What is a SIP calculator?
A SIP calculator estimates what a fixed monthly investment could be worth after a set number of months, assuming a steady annual rate of return. You enter the instalment, the expected return and the tenure, and it shows the projected maturity value, the total you put in, and the estimated gain. It's a planning aid; it can't predict actual market returns.
SIP explained for readers outside India
SIP stands for Systematic Investment Plan. In India it's the standard way to invest a fixed sum in a mutual fund every month, usually through an automatic bank debit. The Association of Mutual Funds in India (AMFI) describes it as investing a fixed amount in a mutual fund scheme periodically instead of making a lump-sum investment. The same approach exists elsewhere under other names: a monthly investment plan, a regular savings plan, or automatic contributions to an index fund.
The calculator itself is currency-neutral, so the maths works for any regular monthly investment, whatever you call it.
The formula
FV = P × [((1 + i)^n − 1) ÷ i] × (1 + i)
- P is the monthly instalment.
- i is the monthly rate: expected annual return ÷ 12 ÷ 100.
- n is the number of monthly instalments (the tenure in months, as a whole number).
This is the future value of an annuity due: each instalment is assumed to be invested at the start of the month, so it earns a full month's return straight away. Without the final (1 + i), you'd get an ordinary annuity, where each payment is made at the end of the month. At a 0% return the maturity value is simply P × n.
Total invested is P × n, and estimated returns are maturity value − total invested. Figures are rounded to two decimal places.
Worked example
A SIP of 5,000 a month for 120 months (10 years), with an assumed return of 12% a year. This is an example rate, not a prediction:
- Monthly rate: i = 12 ÷ 12 ÷ 100 = 0.01.
- (1.01)^120 = 3.300387.
- (3.300387 − 1) ÷ 0.01 = 230.0387.
- × 1.01 = 232.3391.
- × 5,000 = 1,161,695.38 maturity value.
You'd have invested 600,000, so the estimated return is 561,695.38. If the same instalments were made at the end of each month (an ordinary annuity), the result would be 1,150,193.45, about 1% less.
How tenure changes the outcome
5,000 a month at the same assumed 12% return:
| Tenure | Total invested | Maturity value | Estimated returns |
|---|---|---|---|
| 5 years (60 months) | 300,000.00 | 412,431.83 | 112,431.83 |
| 10 years (120 months) | 600,000.00 | 1,161,695.38 | 561,695.38 |
| 15 years (180 months) | 900,000.00 | 2,522,880.00 | 1,622,880.00 |
| 20 years (240 months) | 1,200,000.00 | 4,995,739.60 | 3,795,739.60 |
Doubling the tenure from 10 to 20 years doubles what you invest but more than quadruples the maturity value under this assumption. That's compounding: later years earn returns on a much larger balance.
How to use the calculator
- Enter your monthly investment.
- Enter an expected annual return as a percentage. Try more than one rate.
- Enter the tenure in months (10 years = 120).
- Click Calculate to see the maturity value, total invested and estimated returns.
Why real results will differ
Mutual funds invest in markets, so their returns vary from month to month and can be negative over some periods. A fixed-rate projection smooths all of that out. In particular, the calculator doesn't account for:
- Market volatility. The order of good and bad years affects what a SIP ends up worth, even with the same average return.
- Costs. Fund expense ratios and any exit loads reduce returns.
- Tax on gains when you redeem.
- Inflation. The maturity value is in future money, which will buy less than the same amount today.
- Missed or changed instalments, including step-up SIPs that increase each year.
For details of a specific fund, read its scheme documents, and see the investor education material from India's market regulator, SEBI.
Related calculators
- Compound interest calculator: growth of a one-off lump sum.
- FD & RD calculator: fixed-rate bank deposits, including monthly recurring deposits.
- Retirement calculator: monthly contributions plus existing savings over a longer horizon.
- ROI calculator: the return on an investment once you know the outcome.
Results are estimates for illustration and aren't financial advice; mutual fund investments are subject to market risk and actual returns may differ.
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