SIP Calculator
Plan your investments, estimate your returns, and visualize your path to financial goals with our easy-to-use SIP planner.
5K
₹0
₹0
₹0
₹0
Investment Summary
With a monthly investment of ₹5,000 for 10 years at 12% annual returns, your investment of ₹0 could grow to ₹0, generating ₹0 in returns.
How to Use Our SIP Calculator: A Step-by-Step Guide
Our calculator is designed for simplicity and power. Follow these steps to get a clear picture of your investment potential:
- Monthly Investment: Enter the amount you plan to invest each month.
- Expected Return Rate (%): Input the annual rate of return you anticipate from your mutual fund. A common estimate for equity funds is 12%.
- Investment Duration (Years): Set the total number of years you wish to stay invested.
- Annual Increase (%): (Optional) To accelerate your wealth creation, specify a percentage by which you'll increase your monthly SIP each year. This is known as a 'Step-Up SIP'.
Once you fill in the details, the calculator will instantly show your total investment, estimated returns, and the future value of your corpus, complete with a detailed chart and year-wise breakdown.
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is a method of investing in mutual funds where you invest a fixed amount of money at regular intervals (usually monthly). Instead of a large one-time investment (like a lumpsum), SIPs encourage disciplined investing. This approach offers two major benefits: Rupee Cost Averaging, which averages out the purchase cost over time, and the power of compounding, where your returns start earning returns of their own, leading to exponential growth over the long term.
Understanding the Key Inputs in the SIP Calculator
- Monthly SIP Amount (P): This is the core of your investment plan—the fixed sum you commit to investing every month.
- Expected Return Rate (i): This is an assumption about the annualized return your investment might generate. It's crucial to be realistic with this figure. Equity funds may have higher potential returns but also higher risk.
- Investment Duration (n): The longer you invest, the more time your money has to benefit from compounding. Even small investments can grow into a large corpus over decades.
- Annual Step-Up: This powerful feature models the practice of increasing your SIP amount annually. As your income grows, increasing your investment helps you reach your financial goals significantly faster.
The Formula Behind Our SIP Calculator
For a standard SIP, the future value is calculated using the compound interest formula:
M = P × ({[1 + r]^n - 1} / r) × (1 + r)- M = Maturity Amount (the future value)
- P = Monthly SIP Amount
- r = Monthly Rate of Return (Annual Rate / 12 / 100)
- n = Number of Months (Investment Duration in Years × 12)
Our calculator enhances this by individually computing the growth for each year when a 'Step-Up' or 'Annual Increase' is applied, providing a more precise projection.
Frequently Asked Questions (FAQ)
What is a good expected return rate for a SIP?
Historically, diversified equity mutual funds have delivered long-term average returns in the range of 12-15% per annum. However, this is not guaranteed. It's wise to be conservative; using a rate like 10-12% for planning can provide a more realistic projection. For debt funds, a rate of 6-8% is more appropriate.
What is a Step-Up or Annual Increase in SIP?
A Step-Up SIP, also known as a top-up SIP, is a feature that allows you to automatically increase your monthly SIP contribution by a fixed percentage or amount at regular intervals, typically yearly. This aligns your investments with your growing income, helping you reach your financial goals faster.
Is SIP better than a Lumpsum investment?
Both SIP and Lumpsum have their advantages. SIPs are ideal for salaried individuals as they promote disciplined investing and benefit from rupee cost averaging, reducing the impact of market volatility. Lumpsum is suitable for investors who have a large sum of money and are willing to time the market, which can be risky. For most retail investors, SIP is considered a safer and more systematic approach.
Can I stop my SIP anytime?
Yes, you can stop your SIP payments at any time without a penalty from the fund house. You can also pause it for a few months or redeem your invested amount (subject to exit loads and capital gains tax).