SIP Calculator

How a SIP builds wealth

A SIP, or systematic investment plan, means investing a fixed amount at regular intervals rather than a single lump sum. Its strength is discipline: you keep investing through ups and downs instead of trying to time the market.

Because you buy at many different prices, you automatically buy more units when prices are low and fewer when they are high, which averages out your cost over time. Combined with compounding on the returns, regular contributions can grow into a substantial amount.

What changes your final amount

Three things drive the outcome: how much you invest each period, how long you keep going, and the average return you earn. Of these, time is usually the most powerful, thanks to compounding.

Starting a few years earlier, or increasing your contribution as your income rises, can make a large difference to the final figure. Returns are never guaranteed, so treat any projection as an estimate and revisit it as your circumstances change.

What is a SIP?

A Systematic Investment Plan is a method of investing a fixed sum at regular intervals, usually monthly, into a mutual fund or similar instrument, benefiting from rupee/dollar cost averaging and compounding.

How is SIP maturity value calculated?

It uses the future value of an annuity formula: FV = P × [((1+i)^n − 1) / i] × (1+i), where P is the monthly investment, i is the monthly return and n is the number of months.

Is the expected return guaranteed?

No. Market-linked returns vary, so the figure is an estimate for planning. This tool assumes a constant rate for illustration only.

Does a longer SIP make a big difference?

Yes, because of compounding, extending a SIP by even a few years can significantly increase the final maturity value.