About the SIP Calculator
A SIP (Systematic Investment Plan) is a disciplined way to invest a fixed amount every month toward long-term goals such as retirement, education, or wealth creation. This SIP Calculator projects the potential future value of your monthly contributions based on an expected annual return and investment tenure, assuming monthly compounding. It helps you visualize how steady contributions and compounding work together to build wealth over time—even if market returns fluctuate in the short term.
Monthly investing promotes rupee/dollar-cost averaging: you buy more units when prices are low and fewer when prices are high, smoothing market volatility. By adjusting the expected return, tenure, and contribution amount, you can compare scenarios and assess whether you are on track. Consider stepping up your SIP annually to keep pace with income growth and inflation.
Returns are not guaranteed. Real outcomes vary with market performance, fees, and taxes. Use prudent assumptions, stay diversified, and review your plan periodically. This calculator offers an educational estimate to support informed, goal-based investing.
Key features
- Future value with monthly compounding
- Total invested vs. wealth gained
- Flexible contribution, return, and tenure inputs
How to use
- Enter your monthly contribution.
- Provide an expected annual return (percentage).
- Set the total investing period (years).
- Review the projected future value and the wealth gained.
Formula
FV = P × \[((1 + i)n − 1) / i\] where P is monthly contribution, i is monthly rate, n is months.
Variables
| Symbol | Meaning |
|---|---|
| P | Monthly contribution |
| i | Monthly interest rate (annual rate / 12) |
| n | Total number of months |
Examples
- Investing $300 per month at 8% for 20 years can potentially grow to a sizable corpus through compounding.
- Starting 5 years earlier often beats starting later with higher contributions, thanks to more time in the market.
- Increasing SIPs by 5% annually offsets inflation and can materially boost the ending value.
Tips
- Choose an attainable contribution you can sustain through market cycles.
- Automate contributions to stay consistent and avoid timing the market.
- Increase SIP amounts annually as income rises to accelerate progress.
- Diversify across assets based on your risk tolerance and time horizon.
- Account for fees and taxes; use tax-advantaged vehicles where possible.