SIP Calculator - Calculate Systematic Investment Plan Returns
Free SIP calculator to determine potential returns on your mutual fund investments with systematic investment plans. Enter monthly investment amount, expected return rate, and investment period
SIP Calculator
Results
How to Use This Calculator
Monthly Investment
Enter the fixed amount you plan to invest every month through SIP
Expected Return
Enter your expected average annual return (historically 12% for equity mutual funds)
Investment Period
Enter how many years you plan to stay invested
Click Calculate
The calculator will show your projected investment growth
Understanding Systematic Investment Plans (SIPs)
A Systematic Investment Plan (SIP) is a disciplined investment approach where you invest a fixed amount regularly in mutual funds. It's an excellent way to build wealth over the long term while averaging out market volatility.
What is SIP?
SIP allows you to invest a predetermined amount at regular intervals in mutual funds. It's similar to a recurring deposit, but for market-linked investments.
To better understand the power of compounding that SIP leverages, you can explore our compound interest calculator.
For broader investment planning and projections, consider using our investment calculator.
If you're also focusing on building savings, our savings calculator can help you set achievable goals.
Benefits of SIP
SIP offers rupee cost averaging, power of compounding, and promotes financial discipline by encouraging regular investing.
Rupee Cost Averaging
You buy more units when prices are low and fewer when high, averaging out your purchase cost and reducing market timing risk.
Understanding Your Results
The SIP calculator provides key insights into your investment potential. Understanding these numbers helps you make better financial decisions.
Future Value
This is the total amount your investments will be worth at the end of your investment period, including principal and returns.
Total Amount Invested
This is the sum of all your monthly investments over the investment period - the actual money you put in.
Estimated Returns
This is the "free money" earned through compounding and market returns. Higher numbers indicate more effective investments.
Important Considerations and Limitations
While our SIP calculator provides useful estimates, there are important factors to consider for real-world investing.
1. Market Volatility
Mutual fund returns vary year to year. Our calculator assumes average returns, but actual performance will fluctuate.
2. Fund Selection
The type of mutual fund significantly affects returns. Equity funds offer higher growth but more risk than debt funds.
3. Expense Ratio & Fees
Mutual funds charge fees that reduce returns. Our calculator doesn't account for expense ratios, exit loads, or taxes.
Frequently Asked Questions (FAQ)
Q: What is a SIP calculator?
A: A SIP calculator is a financial tool that helps you estimate the future value of your investments when you invest a fixed amount regularly in mutual funds through SIP. It uses compounding to project growth.
Q: How accurate is a SIP calculator?
A: A SIP calculator provides estimates based on your inputs. While it gives good approximations, actual returns may vary due to market fluctuations and economic factors. It's a planning tool, not a guarantee.
Q: What is the formula used in a SIP calculator?
A: The SIP calculator uses the future value of an annuity formula: FV = P × [((1 + i)^n - 1) / i] × (1 + i), where P is monthly investment, i is monthly rate, and n is total months.
Q: What is the benefit of starting SIP early?
A: Starting SIP early allows you to benefit from the power of compounding over a longer period. The longer your investment horizon, the more your money has time to grow exponentially.
Q: Can I use SIP calculator for other investments?
A: Yes, the underlying formula can be used for any regular investment with compound growth, such as recurring deposits, regular stock investments, or systematic investment approaches.
Q: Is SIP better than lump sum investment?
A: Both have advantages. SIP helps with rupee cost averaging and reduces volatility impact. Lump sum may yield higher returns in rising markets but carries higher risk. Choice depends on your risk appetite.