SIP Calculator
Estimate the future wealth of your Systematic Investment Plans (SIP). Find out how compounding interest grows your monthly savings over time.
Amount you want to invest every month.
Expected annual returns from your portfolio.
Number of years you plan to keep investing.
Breakdown of Wealth vs Invested Cash
Wealth Projection Milestones
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How to use SIP Calculator
- Set Monthly Investment: Adjust the first slider to define how much money you want to invest every month.
- Enter Expected Return Rate: Specify the annual return rate (p.a.) you expect from your mutual funds portfolio.
- Select Tenure: Determine the number of years you want to keep the SIP active. The calculator will estimate your total invested capital and accumulated wealth.
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is a structured investment methodology offered by mutual funds in India. It enables individuals to invest a fixed amount regularly (weekly, monthly, or quarterly) in their chosen mutual fund schemes. This instills financial discipline and makes investment manageable without timing the market.
Formula Used for SIP Future Value Calculations
The future value of an SIP is calculated using the future value of an annuity formula:
• M: Future value / Maturity amount
• P: Monthly investment amount
• i: Monthly return rate (Annual return rate / 12 × 100)
• n: Total number of monthly contributions (Tenure in years × 12)
Example of a SIP Return Calculation
If you invest ₹5,000 monthly in an equity fund with an expected annual return of 12% for a period of 10 years (120 months):
- Monthly Rate (i): 12 / (12 × 100) = 0.01
- Number of Months (n): 10 × 12 = 120 months
- Maturity Amount (M) = 5,000 × [ ( (1 + 0.01)^120 - 1 ) / 0.01 ] × (1 + 0.01) = ₹11,61,695.
- Your total investment was ₹6,00,000, and the estimated interest returns generated is ₹5,61,695.
SIP Return Estimates for Common Monthly Contributions
The table below showcases the future value growth of monthly SIP investments of different sizes, assuming an average 12% annual rate of return for a tenure of 15 years:
| Monthly SIP | Total Invested | Est. Returns | Future Value |
|---|---|---|---|
| ₹1,000 | ₹1,80,000 | ₹3,24,576 | ₹5,04,576 |
| ₹2,000 | ₹3,60,000 | ₹6,49,152 | ₹10,09,152 |
| ₹5,000 | ₹9,00,000 | ₹16,22,880 | ₹25,22,880 |
| ₹10,00,000 | ₹1,80,00,000 | ₹3,24,57,600 | ₹5,04,57,600 |
Core Benefits of Systematic Investing (SIP)
- Rupee Cost Averaging: Automatically buy more mutual fund units when prices are low and fewer units when prices are high, optimizing cost basis.
- Power of Compounding: Returns earned on your investment are reinvested to generate their own returns, yielding massive wealth compounding over time.
- No Timing the Market: Saves you the stress of finding the perfect entry or exit points since you invest consistently regardless of market cycles.
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Frequently Asked Questions
What is an SIP?
A Systematic Investment Plan (SIP) is a method of investing in mutual funds where an investor contributes a fixed amount at regular intervals (usually monthly) rather than as a lump sum. This instills financial discipline and leverages rupee cost averaging.
What is rupee cost averaging in SIP?
Rupee cost averaging is the practice of investing a fixed sum of money at regular intervals. Under this system, you buy more mutual fund units when the market price (NAV) is low, and fewer units when the NAV is high, lowering your average cost per unit over the long run.
Are SIP returns guaranteed?
No, mutual fund investments are subject to market risks, and returns are not guaranteed. SIP calculators use an expected return rate (e.g. 12% or 15%) for estimation based on historical averages of equity indices, but actual returns can vary.
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