What is a SIP?
A systematic investment plan (SIP) means investing a fixed amount at regular intervals, usually every month, in a mutual fund or similar investment. The idea also works for monthly investing in an index fund or a retirement account in any country and currency.
Investing a fixed amount regularly spreads your purchases over time, so you buy fewer units when prices are high and more when they are low. This is often called cost averaging.
How to use this SIP calculator
- Enter the amount you plan to invest every month.
- Enter the expected annual return and the number of years.
- Optionally enter a yearly step-up, which raises your monthly amount by that percentage each year.
- Press Calculate to see the invested amount, estimated returns, total value and a yearly table.
The SIP formula
Without a step-up, the future value is P x (((1 + i)^n - 1) / i) x (1 + i), where P is the monthly amount, i is the monthly rate (annual return divided by 12) and n is the number of months. The extra (1 + i) assumes each payment is made at the start of the month.
Example: 5,000 a month at 12% for 10 years means 600,000 invested, and a value of about 1,161,700.
Keep expectations realistic
The return you enter is an assumption, not a promise. Market investments go up and down, and past performance does not guarantee future results. Try a lower rate such as 8% or 10% as well as a higher one, and see whether the plan still meets your goal.
This calculator ignores taxes, fund charges and exit loads, which reduce what you actually keep.
Why a step-up helps
Most people earn more as the years go by. Raising your SIP by even 5% to 10% a year makes a big difference to the final value, because larger amounts have more time to grow.
Value of 5,000 a month at 12% a year
| Years | Invested | Estimated value |
|---|---|---|
| 5 years | 300,000 | about 412,400 |
| 10 years | 600,000 | about 1,161,700 |
| 15 years | 900,000 | about 2,522,900 |
| 20 years | 1,200,000 | about 4,995,700 |
Frequently Asked Questions
How is SIP return calculated?
Each monthly amount grows at the monthly rate until the end of the period, and the values are added together using the formula above.
What return should I assume?
Use a conservative rate and test a few values. Returns on market investments are not guaranteed.
What is a step-up SIP?
A plan where your monthly investment increases by a set percentage each year.
Is SIP better than a lump sum?
A SIP spreads the risk of investing at a bad time and suits regular income. A lump sum can do better in a rising market. Which is right depends on your situation.
Can I use it outside India?
Yes. It works for any regular monthly investment in any currency.
Is my data stored?
No. The calculation runs in your browser, so the numbers you enter are not sent to our server.