SIP Calculator
Project the returns on your Systematic Investment Plan — with optional annual step-ups.
Increase your monthly SIP by this much every year as your income grows.
Projected Value
A systematic investment plan is the practice of investing a fixed amount at a fixed interval regardless of what the market is doing, and it works largely because it removes you from the decision. The investor who tries to time entries typically buys after rallies and sells after crashes, which is the exact inverse of the goal. A SIP buys mechanically: more units when prices are low, fewer when prices are high, without asking your opinion. This calculator projects what that discipline compounds into over time — and the numbers are striking, because most of the final balance comes not from what you contributed but from what those contributions earned while you left them alone.
How the calculator works
Enter your monthly investment, the expected annual return, and the number of years you plan to invest. The calculator compounds each installment separately from the month it is invested, since a contribution made in year one has far longer to grow than one made in year nine, then sums them. It shows your total invested alongside the projected value, and the gap between those two figures is where the argument for starting early lives.
The formula
FV = P × [((1 + i)^n − 1) ÷ i] × (1 + i)
Where:
P = monthly investment
i = monthly rate (annual rate ÷ 12)
n = number of months
Example: $200/month, 12% annual, 20 years
i = 0.01, n = 240
FV ≈ $199,830 (invested: $48,000)In that example you contributed $48,000 and ended with roughly $199,830 — meaning about 76% of the final balance is growth rather than deposits. That ratio is the entire case for time in the market. Note the trailing (1 + i) term: it assumes each installment is invested at the start of the period rather than the end, which is how most SIPs actually operate. Omitting it understates the result by one month of compounding.
What to know about SIP investing
- 1Rupee-cost averaging is the mechanism, not magic. Investing a fixed sum buys more units when prices fall and fewer when they rise, which lowers your average cost automatically. It does not prevent losses in a falling market — it just ensures a crash becomes an accumulation opportunity rather than a reason to stop.
- 2The last years carry the most weight. In a 20-year SIP, the final five years typically generate more absolute growth than the first ten combined, because compounding acts on a much larger base. This is why stopping a SIP early is so costly: you are cutting off the portion where the curve finally steepens.
- 3Step up your contribution with your income. Increasing a SIP by even 5–10% each year, in line with raises, can nearly double the final corpus over two decades. The increase is painless because it comes from money you never had before, and it is the single most effective adjustment available to you.
- 4The projected return is an assumption, not a promise. Equity markets have historically averaged 10–12% over long periods but delivered that in violent swings — years of 30% gains next to years of 20% losses. Plan on the average, expect the volatility, and treat any smooth projection as a planning tool rather than a forecast.
- 5Do not stop during a downturn. This is when a SIP does its best work, buying more units at depressed prices, and it is precisely when most people cancel. An investor who continued through a crash typically recovers faster than one who paused, because they accumulated cheap units while the other sat in cash.
Frequently asked questions
What return rate should I assume?
For diversified equity funds over long horizons, 10–12% is the conventional planning range, based on multi-decade historical averages. Debt funds run considerably lower, around 6–8%. Subtract inflation for the real figure — a 12% nominal return during 6% inflation is roughly 6% in purchasing power, which is a far less exciting number and the one your retirement actually depends on.
Is a SIP better than investing a lump sum?
Purely mathematically, lump sum usually wins, because money invested earlier spends longer compounding. But that assumes you have the lump sum and the temperament to deploy it all at once into a market that might fall 20% next month. A SIP wins on behavior: it invests money you have not yet earned, removes timing decisions, and is sustainable. For most people the choice is not lump sum versus SIP — it is SIP versus not investing.
What happens if I miss a monthly installment?
Nothing catastrophic. Most plans simply skip the installment; some charge a small penalty if the auto-debit bounces. The real cost is opportunity — one missed month early in a 20-year plan compounds into a meaningful shortfall by the end. If cash is tight, reducing the amount is far better than pausing entirely, since it keeps the habit and the compounding intact.
How long should I run a SIP?
Long enough for compounding to dominate, which realistically means a minimum of seven to ten years for equity, and ideally fifteen or more. Below five years, market volatility can easily overwhelm returns, and you may exit at a loss through no fault of the strategy. The whole mechanism depends on giving the exponential curve enough runway to matter.
Does this calculator account for taxes and fees?
No — it projects gross returns. Fund expense ratios of 0.5–2% annually come directly off your return and compound against you over decades, which is why low-cost index funds hold such a durable advantage. Capital gains tax applies when you redeem, at rates depending on your jurisdiction and holding period. Subtract roughly 1–2% from your assumed return to get a more honest projection.