SIP Calculator

Estimate the potential returns on your Systematic Investment Plan (SIP) and plan your financial goals.

Investment Details

5,000
12 %
10 Years

Maturity Amount

₹ 0

Total Investment

₹ 0

Wealth Gained

₹ 0

Year-wise Growth Projection

Year Investment in Year Return in Year Total Investment Maturity Value

Understanding Your SIP and Investment Planning

Our SIP Calculator helps you estimate the potential returns on your Systematic Investment Plan and achieve your financial goals.

What is SIP?

SIP stands for Systematic Investment Plan. It is a method of investing a fixed amount regularly (e.g., monthly, quarterly) into a mutual fund scheme. SIPs are popular because they allow investors to benefit from rupee cost averaging and power of compounding.

Investing through SIP helps in disciplined investing and can yield significant returns over the long term, even with small regular contributions.


How SIP is Calculated

The SIP maturity amount depends on three main factors:

  1. Monthly Investment (P)
    The fixed amount you invest periodically.
  2. Expected Annual Return (i)
    The anticipated annual rate of return on your investment. For calculation, this is converted to a monthly rate.
  3. Investment Period (n)
    The total duration in months for which you plan to invest.

The formula used is:

$$FV = P \times \frac{((1 + i)^n - 1)}{i} \times (1 + i)$$

Where:

  • $FV$ = Future Value (Maturity Amount)
  • $P$ = Monthly Investment Amount
  • $i$ = Monthly Expected Rate of Return (Annual Rate / 12 / 100)
  • $n$ = Investment Period in Months (Years * 12)

Understanding the Growth Projection

The year-wise growth projection table provides a detailed view of how your investment grows over time. It shows the cumulative investment, the returns earned each year, and the total maturity value at the end of each year.

This projection helps you visualize the power of compounding and how your wealth accumulates over the chosen investment period.


Frequently Asked Questions

Rupee cost averaging is a strategy that helps reduce the impact of volatility on investments. By investing a fixed amount regularly, you buy more units when prices are low and fewer units when prices are high, averaging out your purchase cost over time.

Compounding refers to earning returns on your initial investment as well as on the accumulated returns from previous periods. In SIP, the returns generated from your investments are reinvested, and they also start earning returns, leading to exponential growth over the long term.

Most mutual funds allow you to stop or pause your SIPs. You can typically discontinue your SIP at any time without penalty, though it's advisable to check the specific terms and conditions with your fund house. Pausing can be useful if you face a temporary financial crunch.