A SIP calculator helps you estimate how much your mutual fund investment can grow when you invest through a Systematic Investment Plan. By entering your monthly investment, time period, and expected return rate, you can see the potential maturity value.
Below are the three primary parameters you need to consider while using a SIP calculator:
Once you enter these details, the calculator shows you the total amount you will’ll invest and and estimates of the growth in your investment’s value at the end of the investment period.
Follow the steps below on how to use our mutual fund calculator with just a few clicks:
The growth of a Systematic Investment Plan (SIP) is based on the principle of compounding. Since every instalment is invested for a different length of time, the maturity value is worked out using a formula rather than a simple addition.
A = P × (([1 + r]^n – 1) / r) × (1 + r)
Where:
Many people assume that an annual return of 12% means a flat 1% return per month (12 ÷ 12). But this gives an inflated result because investment returns are compounded.
To get the correct monthly rate, the formula is:
A = P × (([1 + r]^n – 1) / r) × (1 + r)
Monthly Return = (1 + Annual Return)^(1/12) – 1.
Imagine you invest ₹10,000 every month in an SIP for 10 years, expecting an annual return of 12%.
First, convert the 12% annual return into monthly:
r=(1+0.12)1/12–1≈0.00949(0.949%monthly)
Total number of instalments:
n=10×12=120months
Applying the formula:
A=10,000×0.00949(1+0.00949)120–1 ×(1+0.00949)
₹23.2 lakh at maturity.
Here, your contribution is ₹12 lakh, and the rest (~₹11.2 lakh) is the return generated.
The illustration below shows how a monthly SIP of ₹10,000, with an expected annual return of 12% (compounded monthly), can grow over different investment durations.
Duration (Years) | SIP Amount | Total Investment (₹) | Estimated Value at 12% Return (₹) |
---|---|---|---|
1 | ₹10,000 | ₹1.2 Lakh | ₹1.27 Lakh |
2 | ₹10,000 | ₹2.4 Lakh | ₹2.71 Lakh |
3 | ₹10,000 | ₹3.6 Lakh | ₹4.42 Lakh |
4 | ₹10,000 | ₹4.8 Lakh | ₹6.43 Lakh |
5 | ₹10,000 | ₹6.0 Lakh | ₹8.68 Lakh |
6 | ₹10,000 | ₹7.2 Lakh | ₹11.24 Lakh |
7 | ₹10,000 | ₹8.4 Lakh | ₹14.15 Lakh |
8 | ₹10,000 | ₹9.6 Lakh | ₹17.47 Lakh |
9 | ₹10,000 | ₹10.8 Lakh | ₹21.26 Lakh |
10 | ₹10,000 | ₹12.0 Lakh | ₹25.60 Lakh |
The SIP calculator is an easy-to-use online tool that helps you plan your investments better. This systematic investment plan calculator shows you two key numbers:
SIP calculators show how your funds can grow and help you pick the right plan for your goals.
Here are the benefits of using the SIP calculator for your investment needs:
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