SIP Calculator

Output:
Investment Growth Over Time

SIP Calculator – Estimate Your Mutual Fund Returns

Investing in a Systematic Investment Plan (SIP) is one of the best ways to grow wealth over time. Use our SIP Calculator to estimate your mutual fund returns based on monthly investments, expected rate of return, and investment duration.

What is SIP (Systematic Investment Plan)?

Systematic Investment Plan (SIP) is a disciplined investment approach where you invest a fixed amount at regular intervals in mutual funds. SIPs help in wealth creation by leveraging the power of compounding and rupee cost averaging.

How is SIP Calculated?

The maturity amount in SIP is calculated using the formula:

M = P × ((1 + r)ⁿ - 1) × (1 + r) / r

Where:

  • M = Maturity amount
  • P = Monthly investment amount
  • r = Monthly rate of return (Annual rate / 12 / 100)
  • n = Number of months

Example of SIP Calculation

Suppose you invest ₹5,000 per month in a mutual fund offering an annual return of 12% for 10 years.

M = 5,000 × ((1 + 0.01)¹²⁰ - 1) × (1 + 0.01) / 0.01

After 10 years, the total corpus will be approximately ₹11.6 Lakhs, with a total investment of ₹6 Lakhs and a wealth gain of ₹5.6 Lakhs.

Benefits of Investing Through SIP

  • Disciplined Investing: Helps build long-term wealth.
  • Power of Compounding: Earn returns on both principal and accumulated interest.
  • Rupee Cost Averaging: Reduces the impact of market volatility.
  • Flexible & Affordable: Start with as little as ₹500 per month.

How to Use the SIP Calculator?

  1. Enter your monthly investment amount.
  2. Input the expected annual return rate (%).
  3. Specify the investment duration (years).
  4. The calculator will display the total corpus and wealth gain.

Frequently Asked Questions (FAQs)

SIP helps in averaging out the cost and reduces market risks, making it better for long-term investments compared to lump sum.

You can start a SIP with as low as ₹500 per month, depending on the mutual fund scheme.

Yes, SIPs are flexible, and you can stop them anytime without penalties.

No, SIPs are market-linked investments, and returns vary based on mutual fund performance.

Missing a SIP payment does not attract penalties, but regular investments ensure better returns.

Conclusion

The SIP Calculator helps investors estimate their potential returns from systematic mutual fund investments. It is a valuable tool for financial planning, providing clarity on wealth accumulation through disciplined investing.