SIP Calculator

A Systematic Investment Plan, or SIP, is a way of investing in mutual funds by contributing a fixed amount at regular intervals — usually monthly — rather than a single lump sum. It has become the most popular way for individual investors to build wealth, because it makes investing a disciplined habit and removes the need to time the market.

The magic behind a SIP is the combination of two forces: compounding and rupee-cost averaging. Compounding means your returns themselves start earning returns, and over long periods this snowballs dramatically — the bulk of a long-running SIP's final value often comes from growth rather than the money you put in. Rupee-cost averaging means that because you invest a fixed amount each month, you automatically buy more units when prices are low and fewer when they're high, smoothing out your average purchase cost and reducing the risk of investing a large sum at the wrong moment.

The calculation uses the future value of a monthly annuity. For example, investing ₹5,000 a month for 10 years at a 12% expected annual return grows to roughly ₹11.6 lakh, of which only ₹6 lakh is your own contribution — the rest is returns. Push the period to 20 years and the gap widens enormously, which is why starting early matters far more than investing large amounts later.

A few things to keep in mind. The return rate is an assumption, not a guarantee — equity markets are volatile and actual returns vary year to year, so treat the result as an estimate. Longer horizons (7–10 years or more) make SIPs in equity funds far more reliable, since short-term swings smooth out. And returns may be subject to capital gains tax depending on the fund type and holding period. Used consistently over the long term, a SIP is one of the simplest and most effective tools for building wealth.