About the SIP Calculator
A Systematic Investment Plan (SIP) lets you invest a fixed amount at regular intervals — typically every month — into a mutual fund, instead of timing the market with a single lump sum. This calculator estimates what those steady contributions could grow into, and also models two related strategies: STP (Systematic Transfer Plan) and SWP (Systematic Withdrawal Plan). It shows how much you invest in total, the estimated returns earned, and the final maturity value — making the long-term power of regular investing tangible.
How SIP growth is calculated
A SIP is a series of equal investments, each of which grows for the time it stays invested. The maturity value uses the future-value-of-a-series formula:
FV = P × [((1 + i)n − 1) / i] × (1 + i)
where P is the monthly investment, i is the monthly rate of return (the expected annual return divided by 12), and n is the total number of monthly installments. The first installment compounds for the whole period, the last for only a month — the formula sums all of these.
The power of compounding and time
The single most important driver of a SIP’s outcome is time, because returns themselves start earning returns. Consider ₹5,000 invested every month at an assumed 12% annual return:
| Duration | Total invested | Estimated maturity value |
|---|---|---|
| 5 years | ₹300,000 | ₹412,432 |
| 10 years | ₹600,000 | ₹1,161,695 |
| 20 years | ₹1,200,000 | ₹4,995,740 |
| 30 years | ₹1,800,000 | ₹17,649,569 |
Notice the pattern: doubling the years does much more than double the result. Over 30 years you contribute ₹18 lakh but could end with well over a crore — the vast majority of which is growth, not your own money. This is why starting early, even with a small amount, usually beats starting later with a larger one.
SIP, STP and SWP
The three modes cover the full life cycle of an investment. A SIP builds wealth by investing regularly. An STP moves money in fixed steps from one fund to another — for instance, parking a windfall in a low-risk fund and transferring it gradually into equity to reduce timing risk. An SWP does the opposite, paying you a fixed sum at regular intervals from your accumulated corpus, which is popular for generating a steady income in retirement while the remaining balance stays invested.
Using realistic assumptions
The “expected return” is the lever that most changes the result, and it is an assumption, not a guarantee. Mutual fund returns are market-linked and vary year to year; a fund can have a brilliant decade and a flat one. Many investors model diversified equity funds around 10–12% over the long run and debt funds lower, but you should choose a figure you can defend and revisit it. Remember too that the maturity value is in nominal terms — it does not subtract inflation or tax on gains, so its real spending power will be lower.
Getting the most from a SIP
Three habits compound your results: start as early as you can, stay invested through market dips (those are exactly when your fixed amount buys more units), and consider a step-up SIP that raises your contribution as your income grows. To plan the loan side of your finances, see the EMI Calculator, and for fixed-return deposits the RD/FD Maturity Calculator. All calculations here run privately in your browser.
Frequently Asked Questions
What is a SIP?
A Systematic Investment Plan is a way of investing a fixed amount at regular intervals (usually monthly) into a mutual fund, rather than a single lump sum. It builds discipline, averages out your purchase price over market ups and downs (rupee-cost averaging), and harnesses compounding over time.
How is SIP maturity calculated?
Using the future value of a series formula: FV = P × [((1+i)^n − 1) / i] × (1+i), where P is the monthly investment, i is the monthly rate (annual return ÷ 12), and n is the number of months. It assumes each installment is invested and then grows at the expected rate.
Are the returns guaranteed?
No. Mutual fund returns are market-linked and vary year to year; the “expected return” you enter is an assumption, not a promise. Use a realistic long-run figure (many people model equity funds around 10–12%) and remember actual results can be higher or lower.
What do STP and SWP mean?
A Systematic Transfer Plan moves a fixed sum periodically from one fund to another (often from a low-risk fund into equity). A Systematic Withdrawal Plan does the reverse — it pays you a fixed amount at regular intervals from your invested corpus, useful in retirement. This tool models all three.
Why does a longer duration matter so much?
Because compounding accelerates over time. As the table above shows, ₹5,000 a month at 12% grows to about ₹11.6 lakh in 10 years but to roughly ₹1.76 crore in 30 years — the extra years do far more work than the extra contributions, because returns start earning returns.
What is a step-up SIP?
A step-up (or top-up) SIP increases your monthly contribution each year, usually in line with your income growth. It dramatically raises the final corpus compared with a flat SIP. This calculator models a constant monthly amount; for a step-up, estimate in stages or increase the amount and re-run.
Should I invest a lump sum or via SIP?
A lump sum can do better if markets only rise, but a SIP reduces timing risk by spreading purchases across high and low prices, which suits most investors and irregular savers. Many people combine both.
Does this account for inflation or taxes?
No. The maturity value is in nominal terms before any tax on gains and before adjusting for inflation. For real spending power, mentally discount the future value by expected inflation, and check the capital-gains tax rules that apply to your funds.