How to use the SIP Calculator
- Enter the amount you plan to invest every month.
- Enter the yearly return you expect. Use a cautious figure, because returns are not guaranteed.
- Enter the number of years you will keep investing.
- Compare the invested amount with the estimated value to see how much comes from growth.
Formula used
Future value = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i), where P is the monthly investment, i is the monthly return (yearly rate ÷ 12 ÷ 100) and n is the number of months. Each instalment is assumed to be invested at the start of the month.
Worked example
Here is the SIP Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Monthly investment | ₹5,000 |
| Expected return (per year) | 12 % |
| Time period | 10 years |
| Result | |
| Estimated future value | ₹11,61,695 |
| Total invested | ₹6,00,000 |
| Estimated returns | ₹5,61,695 |
Year-by-year growth
The table shows how the default SIP builds up. Notice that the returns column grows faster each year because earlier gains also earn returns.
| Year | Invested | Value | Returns |
|---|---|---|---|
| 1 | ₹60,000 | ₹64,047 | ₹4,047 |
| 2 | ₹1,20,000 | ₹1,36,216 | ₹16,216 |
| 3 | ₹1,80,000 | ₹2,17,538 | ₹37,538 |
| 4 | ₹2,40,000 | ₹3,09,174 | ₹69,174 |
| 5 | ₹3,00,000 | ₹4,12,432 | ₹1,12,432 |
| 6 | ₹3,60,000 | ₹5,28,785 | ₹1,68,785 |
| 7 | ₹4,20,000 | ₹6,59,895 | ₹2,39,895 |
| 8 | ₹4,80,000 | ₹8,07,633 | ₹3,27,633 |
| 9 | ₹5,40,000 | ₹9,74,108 | ₹4,34,108 |
| 10 | ₹6,00,000 | ₹11,61,695 | ₹5,61,695 |
Assumes a constant return, which real markets do not deliver.
How the SIP result is worked out
The calculator assumes your money earns a constant yearly return, converted to a monthly rate, and that each instalment is invested at the start of the month. With ₹5,000 a month at 12% for 10 years, you invest ₹6,00,000 in total and the estimated value is ₹11,61,695, so about ₹5,61,695 comes from returns.
Real SIPs differ in small ways. Funds invest on a particular date each month, and actual returns go up and down from year to year. Treat the result as a planning estimate, not a prediction.
Why time matters more than the amount
Returns are earned on past returns, so the later years contribute far more than the early ones. At 12%, ₹5,000 a month grows to about ₹4,12,432 in 5 years, ₹11,61,695 in 10 years, ₹25,22,880 in 15 years, ₹49,95,740 in 20 years and ₹94,88,175 in 25 years. The amount you invest only grows from ₹3,00,000 to ₹15,00,000 across those periods.
Starting late is costly. Investing ₹5,000 a month for 20 years gives about ₹49,95,740, while the same SIP started 10 years later and run for 10 years gives about ₹11,61,695, less than a quarter of the result.
Choosing a realistic return
The return you enter has a large effect. For ₹5,000 a month over 10 years, the estimated value is ₹9,20,828 at 8%, ₹10,32,760 at 10%, ₹11,61,695 at 12% and ₹13,93,286 at 15%. Equity mutual fund returns are market-linked and can be negative in some years, so avoid planning around the highest number.
A good habit is to run the calculator at two or three different returns and plan so that your goal is still reachable at the lower one. You can also raise the monthly amount: ₹10,000 a month at 12% for 10 years gives about ₹23,23,391.
What this calculator does not include
The result is before tax and assumes the return you enter is already after fund expenses. It does not model step-up SIPs where you raise the amount every year, missed instalments, exit loads or changes in capital gains tax rules. Check the latest tax treatment for your type of fund before you plan.
Frequently asked questions
What is the formula for SIP returns?
Future value = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i), where P is the monthly investment, i is the monthly return (yearly rate ÷ 12 ÷ 100) and n is the number of months.
Are SIP returns guaranteed?
No. Mutual fund returns depend on the market and can be lower than expected or negative, especially over short periods. The calculator only shows what would happen if your assumed return stayed constant.
What return should I assume for a SIP?
There is no correct number. Use a conservative figure that you would be comfortable with, and test lower values as well. Debt funds usually have lower expected returns than equity funds.
How much should I invest every month?
Work backwards from your goal: try different monthly amounts until the estimated value matches the target amount. Then check that the monthly amount fits comfortably within your budget, because stopping early weakens the result.
Is a SIP better than a lump sum?
A SIP suits regular income and spreads your entry across market levels. A lump sum puts all the money to work at once. Which is better depends on market movements, which nobody can predict, and on how your money arrives.
Does the calculator include taxes?
No. Gains from mutual funds can be taxed, and the rules depend on the fund type and holding period and can change. Confirm the current rules with a tax professional or the official income tax website.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.