SIP Calculator

What a SIP calculator actually tells you

A Systematic Investment Plan is an arrangement where you invest a fixed sum into a mutual fund on the same date every month, regardless of what the market is doing. A SIP calculator estimates what that stream of monthly instalments could be worth at the end of your chosen period, and — more usefully — how much of that final figure came from your own pocket versus how much came from compounding.

That second number is the one worth paying attention to. Over a ten-year SIP the split between contributions and returns is usually close to even. Over twenty-five years, returns typically dwarf contributions. Watching that ratio shift as you drag the time-period slider is the single clearest argument for starting early that anyone can show you.

The formula behind the numbers

SIP maturity is calculated using the future value of an annuity due — "due" because each instalment is invested at the beginning of the period rather than the end, so every payment earns one extra month of growth:

M = P × ((1 + i)ⁿ − 1) / i × (1 + i)

• M — maturity amount
• P — your monthly instalment
• i — periodic rate of return, which is the annual rate divided by 12
• n — total number of instalments (years × 12)

This is the same method used by fund houses and investment platforms, which is why the figure here should match what you see elsewhere for identical inputs.

A worked example

Suppose you invest 10,000 a month for 15 years at an assumed 12% annual return. Your own contributions total 18,00,000 — that is 180 instalments of 10,000. The calculator returns a maturity value of roughly 50,45,000. In other words, a little over 32,00,000 of the final corpus was generated by compounding rather than by you.

Now change one variable. Keep everything identical but run it for 20 years instead of 15. Contributions rise to 24,00,000, but the maturity value jumps to around 99,90,000. Five extra years of instalments added 6,00,000 of your money and roughly 43,00,000 of growth. That disproportion is the whole point of compounding, and it is why the last few years of a long SIP matter far more than the first few.

How to use this calculator well

Start with your actual monthly capacity rather than an aspirational figure — a SIP you cancel after eight months is worse than a smaller one you keep for a decade. For the return rate, be conservative. Equity funds in India have historically delivered somewhere in the 10–14% range over long periods, but any single decade can fall well outside that band. Running your plan at 10% and treating anything above it as a bonus is a healthier habit than planning at 15% and being disappointed.

Then use the time period slider as a thinking tool rather than a fixed input. Compare 10, 15 and 20 years for the same instalment. The gap between them tends to be more persuasive than any amount of advice.

What the calculator does not account for

These projections are deliberately simplified, and there are four real-world factors that will move your actual outcome:

• Market volatility. The calculator assumes a smooth, constant rate of return. Real markets deliver that average through a sequence of good and bad years, and the order in which they arrive affects your result.
• Expense ratio. Fund management charges are deducted before returns reach you. If a fund charges 1.5% and returns 12% gross, your effective rate is closer to 10.5%. Enter the net figure.
• Taxes. Capital gains on equity funds are taxable on redemption, and rules differ by fund type and holding period. The maturity figure shown here is pre-tax.
• Step-up contributions. Many investors raise their instalment as income grows. This calculator assumes a flat amount throughout, so it will understate the outcome if you plan to increase yours annually.

Treat the output as a well-reasoned estimate for planning, not a promise. It is accurate arithmetic applied to an assumption you have chosen.