How is SIP return calculated?

SIP returns are calculated using the compound interest formula: FV = P × [(1 + r)^n - 1] / r × (1 + r), where P is the monthly investment, r is the monthly rate of return (annual rate/12/100), and n is the total number of months. This formula accounts for the power of compounding where each installment earns returns on returns.

What is a good return rate for SIP?

Historically, equity mutual funds in India have delivered 12-15% annual returns over long periods (10+ years). Large-cap funds typically return 10-12%, mid-cap funds 12-15%, and small-cap funds 15-18% annually. However, past performance doesn't guarantee future results. For conservative estimates, use 10-12% for equity SIPs.

Is SIP better than lump sum investment?

SIP is generally better for most investors because it offers rupee cost averaging (buying more units when prices are low), disciplined investing habit, and reduced timing risk. Lump sum may outperform in consistently rising markets, but SIP provides psychological comfort and is ideal for salaried individuals with regular income.

What is the minimum amount to start SIP?

Most mutual funds in India allow SIP investments starting from as low as ₹500 per month. Some funds even accept ₹100 monthly SIPs. This low entry barrier makes mutual funds accessible to everyone, allowing you to start your wealth creation journey early regardless of your income level.

Are SIP returns guaranteed?

No, SIP returns are not guaranteed as they depend on market performance. Equity mutual funds are subject to market risks. The returns shown in this calculator are estimates based on your expected return rate. Actual returns may vary. Always invest based on your risk appetite and financial goals.

What is the power of compounding in SIP?

Compounding means earning returns on your returns. In SIP, each monthly investment starts generating returns, and these returns themselves earn more returns over time. For example, ₹10,000 monthly SIP at 12% for 20 years grows to ₹99.9 lakhs, though you invested only ₹24 lakhs. The remaining ₹75.9 lakhs is purely from compounding.

Should I increase my SIP amount yearly?

Yes, increasing your SIP amount annually (called Step-up SIP) is highly recommended. A 10% yearly increase can significantly boost your final corpus. For example, ₹10,000 SIP with 10% annual step-up at 12% returns for 20 years yields ₹1.9 crore vs ₹99.9 lakhs without step-up.

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SIP Calculator

Calculate Your Systematic Investment Plan Returns Online

Use our free SIP calculator to estimate how much wealth you can create through regular mutual fund investments. Plan your financial goals with accurate projections based on your monthly investment amount and expected returns.

Enter Investment Details

Monthly Investment Amount

₹

₹500₹1,00,000

Expected Annual Return Rate

1%30%

Typical returns: Large Cap (10-12%), Mid Cap (12-15%), Small Cap (15-18%)

Investment Duration

Years

1 Year40 Years

Quick Presets

Your Investment Results

Total Value After 10 Years

₹23.23 L

₹23,23,391

Total Investment

₹12.00 L

Wealth Gained

+₹11.23 L

Absolute Returns+93.6%

Investment vs Returns Breakdown

Invested (52%)Returns (48%)

Monthly SIP

₹10,000

Total Months

120

Year-by-Year SIP Growth Breakdown

See how your SIP investment of ₹10,000/month grows each year with 12% expected annual returns.

Year	Amount Invested	Returns Earned	Total Value
Year 1	₹1,20,000	+₹8,093	₹1,28,093
Year 2	₹2,40,000	+₹32,432	₹2,72,432
Year 3	₹3,60,000	+₹75,076	₹4,35,076
Year 4	₹4,80,000	+₹1,38,348	₹6,18,348
Year 5	₹6,00,000	+₹2,24,864	₹8,24,864

What is SIP and How Does It Work?

A Systematic Investment Plan (SIP) is a disciplined investment method that allows you to invest a fixed amount regularly (usually monthly) in mutual funds. Instead of investing a lump sum, SIP helps you build wealth gradually through the power of compounding and rupee cost averaging.

Key Benefits of SIP Investment

1. Rupee Cost Averaging

When markets are down, your fixed SIP amount buys more units. When markets rise, you buy fewer units. This averages out your purchase cost over time, reducing the impact of market volatility.

2. Power of Compounding

Your returns generate more returns over time. Starting early with even small amounts can create significant wealth. A ₹5,000 monthly SIP at 12% for 30 years grows to over ₹1.76 crore!

3. Disciplined Investing

SIP automates your investment through auto-debit, ensuring you invest regularly without the need to time the market or remember to invest manually each month.

4. Flexibility & Accessibility

Start with as low as ₹500/month. Increase, decrease, pause, or stop your SIP anytime. No lock-in period for most equity funds (except ELSS with 3-year lock-in).

SIP Calculator Formula

The SIP maturity value is calculated using the compound interest formula:

M = P × [(1 + r)^n - 1] / r × (1 + r)

Where:

M = Maturity amount (future value)
P = Monthly SIP amount
r = Monthly rate of return (annual rate ÷ 12 ÷ 100)
n = Total number of months

Types of SIP

Regular SIP

Fixed amount invested every month on a predetermined date.

Step-up SIP (Top-up SIP)

SIP amount increases annually by a fixed percentage or amount. Try our Step-up SIP Calculator →

Flexible SIP

Allows you to vary the investment amount based on cash flow.

Perpetual SIP

No end date; continues until you manually stop it.

SIP vs Lump Sum Investment: Which is Better?

Factor	SIP	Lump Sum
Investment Approach	Regular periodic investments	One-time large investment
Market Timing Risk	Low (averaged out)	High
Best For	Salaried individuals	Those with surplus funds
Capital Required	Low (₹500+)	High (₹5,000+)
Discipline	Enforced automatically	Self-discipline needed

Pro Tip: For most investors, especially those with regular income, SIP is the preferred choice. It eliminates the stress of timing the market and builds a disciplined saving habit.Compare with our Lump Sum Calculator →

Frequently Asked Questions About SIP

A SIP (Systematic Investment Plan) Calculator is a free online tool that helps you estimate the future value of your mutual fund investments made through regular monthly contributions. It uses compound interest formula to project your wealth accumulation over time based on your investment amount, expected returns, and investment duration.

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Step-up SIP Calculator

Calculate returns with yearly SIP increase

Lump Sum Calculator

One-time investment returns calculator

Compound Interest Calculator

Understand the power of compounding

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Disclaimer: This SIP calculator provides estimates based on the inputs provided and assumed constant returns. Actual mutual fund returns are subject to market risks and may vary. Past performance does not guarantee future results. The calculator does not account for expense ratios, exit loads, or taxes. Please consult a financial advisor before making investment decisions.