What is a SIP calculator?
A Systematic Investment Plan (SIP) calculator is a tool that estimates the future value of regular monthly investments into a mutual fund. You plug in how much you'll invest each month, an expected rate of return, and how long you'll stay invested. It returns a projection of invested amount, estimated returns, and total value at the end of the period.
How does a SIP calculator work?
The formula behind the calculator is:
FV = P × [((1 + r)^n − 1) / r] × (1 + r)
Where:
- FV is future value (total value at maturity)
- P is your monthly investment amount
- r is the monthly rate of return (not annual – convert annual to monthly via (1 + annual)^(1/12) − 1)
- n is the number of months
A common mistake is dividing the annual return by 12 to get the monthly rate. That's technically inaccurate; the correct conversion is a compound root. For a 12% annual return, the effective monthly rate is ~0.95%, not 1.00%.
How to use this calculator
- Pick whether you're doing a SIP (monthly investment) or a Lumpsum (single upfront).
- Enter the amount – the slider is for rough selection, the number field is for precision.
- Set an expected annual return. Historical Indian equity fund averages sit in the 11–13% range over 15+ years. For conservative planning, use 10%.
- Pick a time horizon. The longer, the better compounding works.
The result shows:
- Invested amount: the total rupees you'll have put in.
- Est. returns: the growth above what you invested.
- Total value: the final corpus.
Assumptions and limits
- Returns are estimates, not guarantees. Markets deliver returns in a lumpy, non-linear way. A 12% annualised return over 20 years will include individual years of -30% and years of +50%.
- The calculator does not deduct:
- Expense ratio of the fund (typically 0.2% for index, 1% for active direct).
- Exit load (usually 1% if redeemed within 1 year).
- Capital gains tax (12.5% LTCG above ₹1.25 L/year on equity in 2026).
- Inflation is not applied. At 6% inflation, the real purchasing power of your corpus will be roughly a third of the nominal value over 20 years.
Advantages of using a SIP calculator
- Reverse-engineer a goal. Have a ₹1 Cr retirement target in 15 years? Slide the monthly amount up until the calculator says ₹1 Cr. That's your SIP.
- Compare SIP vs Lumpsum instantly. The same amount deployed as lumpsum vs SIP gives different outcomes at different rates – the tab switcher makes the comparison immediate.
- Visualise compounding. The donut chart separates invested amount from returns. After 10 years, returns usually dwarf the invested amount – seeing that is more motivating than any textbook.
Frequently asked questions
Is the result guaranteed? No. Mutual funds are market-linked. Past performance is not indicative of future results. Use conservative return assumptions for critical goals.
What return rate should I use? For Indian equity diversified funds planned over 15+ years, 10–12% is a reasonable historical range. For debt-heavy portfolios, use 6–7%. For balanced, 8–9%.
SIP or Lumpsum – which is better? Depends on whether you have a lumpsum to deploy and your risk tolerance. See our detailed comparison: SIP vs Lumpsum: Which Actually Wins in Indian Markets?.
Should I increase my SIP over time? Yes. Aim for a 10% annual SIP increase – this alone can double your corpus over a 20-year period compared to a static SIP.
