What Is a SIP
A Systematic Investment Plan, or SIP, is an arrangement with a mutual fund where a fixed amount is automatically debited from your bank account every month and used to buy units of the fund at that day's price. Over months and years the schedule enforces discipline and smooths out the buying price. When markets are high you get fewer units for the same money. When they are low you get more. This rupee cost averaging effect, combined with the power of compounding, is why SIPs have become the default wealth building habit for millions of investors across South Asia.
How the Calculator Works
The projected value is computed with the standard future value formula for a monthly annuity invested at the start of each period:
FV = P x [((1 + i)^n - 1) / i] x (1 + i)
Here P is the monthly investment, i is the monthly return (annual rate divided by 12 and converted to a decimal) and n is the total number of months. The result is the pre-tax maturity value assuming the chosen rate of return holds for the full tenure.
How to Use This Tool
- Pick your currency. The output formatting updates automatically.
- Set the monthly amount you plan to invest. Start where you are, not where you wish you were.
- Enter an expected annual return. Long-run equity mutual funds in India have historically returned around 11 to 14 percent, but there is no guarantee.
- Enter the duration in years. The longer the tenure, the more compounding compounds.
- Read the result card. It shows maturity value, total invested and the wealth gain created by compounding.
Picking a Realistic Return
- Equity funds: around 11 to 14 percent long-run historical in India. Expect wide swings year to year.
- Hybrid funds: 8 to 11 percent, lower volatility.
- Debt funds: 6 to 8 percent, closer to a bank fixed deposit.
- Index funds: track the index they follow, usually in the equity band less a small expense ratio.
SIP vs Lump Sum
A SIP spreads the cost of entry across many market days, which is forgiving when timing is unknown. A lump sum invests all the money at once, which outperforms a SIP if the market trends up steadily from day one. For most investors who do not have a large amount already parked in cash, the SIP route is the practical path.
Step-Up SIP
Many investors increase their SIP by a fixed percentage each year as income grows. A step up SIP meaningfully boosts the final corpus because later contributions ride the compounding curve. Though this calculator shows the flat SIP outcome, mentally add 10 percent year on year to see how a step up could change the picture.
Tax Note
In India, equity mutual fund gains redeemed after one year are taxed at 10 percent beyond an exemption threshold of Rs 1 lakh per year. Debt fund rules changed in 2023 to tax gains at slab rate. Your final take home will be below the projected value. Check the current rules in your country before planning.
Privacy
All calculations happen locally in your browser. No numbers are uploaded or stored.
Frequently Asked Questions
What is a SIP?
A disciplined way to invest a fixed amount in a mutual fund every month.
How is SIP maturity calculated?
Using the future value of a monthly annuity formula compounded monthly.
What return rate should I use?
10 to 12 percent is a conservative long-run assumption for equity SIPs.
Are the returns guaranteed?
No. Markets fluctuate. The result is an estimate.
Is the output pre-tax?
Yes. Capital gains tax may reduce your actual take-home amount.
Can I use this for recurring deposits?
Yes, same formula.
Is my data private?
Yes. Nothing leaves your browser.