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How a SIP builds up
A systematic investment plan puts a fixed amount into a mutual fund every month rather than one lump sum. Each instalment buys units at whatever the price is that month, and each one then has its own run of compounding — so the money you invest in year one works far harder than the money you invest in year nine. This SIP calculator shows what you put in, what the returns added, and the maturity value.
How to use the SIP Calculator
- Enter your Monthly Investment.
- Enter an Expected Annual Return (%) — 10–12% is a common long-term equity assumption.
- Set the Time Period (Years).
- Compare invested against returns to see how much of the total is growth.
Formula and a worked example
M = P × ((1 + i)n − 1) ÷ i × (1 + i)
P is the monthly instalment, i the monthly rate (annual ÷ 12 ÷ 100) and n the number of months. This is the future value of an annuity — each instalment compounds for a different length of time, and the formula sums all of them.
Worked example
5,000 a month at 12% for 10 years: you invest 600,000 and finish with roughly 1,161,700, so returns contributed about 561,700. Run the same 5,000 for 20 years and the total leaps to around 4,995,700 — twice the time, more than four times the money.
Frequently asked questions
Is a SIP better than investing a lump sum?
Neither wins always. A SIP averages your purchase price and removes the need to time the market; a lump sum has longer to compound if markets rise. Most people choose a SIP because it matches how salaries arrive.
What return should I assume?
Be conservative. Equity funds have historically returned around 10–12% over long periods, but no return is guaranteed and short periods can be negative.
What happens if I miss a month?
Nothing breaks — you simply have one fewer instalment compounding. Run the calculator with a shorter period to see the effect.
Does this account for tax or fund charges?
No. It shows gross growth. Subtract the fund's expense ratio from your expected return for a more realistic figure, and check the capital gains rules where you live.
Related calculators
Other tools people use alongside the SIP calculator.