SIP Calculator
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Yearly SIP Investment Growth Table
This table shows the growth of your SIP investment year by year, including invested amount, estimated returns, and total value.
| Year | Invested Amount | Estimated Returns | Total Value |
|---|
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SIP Calculator – Systematic Investment Planner Tool
A Systematic Investment Plan (SIP) is one of the smartest ways to invest regularly in mutual funds. It promotes financial discipline and allows your investments to grow steadily over time. With our SIP Calculator, you can easily estimate how much your investments will grow over a specific period with a fixed monthly contribution.
What is SIP?
SIP stands for Systematic Investment Plan. It is a method of investing a fixed amount in a mutual fund scheme at regular intervals – typically monthly. SIPs are a hassle-free way of investing that enable investors to contribute small amounts regularly instead of a large lump sum.
How Does a SIP Work?
When you invest via SIP, your money buys a certain number of mutual fund units based on the prevailing Net Asset Value (NAV). Over time, this leads to rupee cost averaging, reducing the impact of market volatility, and compounding returns over the long term.
SIP Calculator Formula
The future value of your SIP investment is calculated using the following formula:
- FV = Future Value (maturity amount)
- P = Monthly investment amount
- r = Rate of return per month (annual rate / 12 / 100)
- n = Number of months (years × 12)
Example of SIP Calculation
Let’s assume you invest $5,000 per month for 10 years at an annual return of 12%. Here’s how the maturity amount is calculated:
- P = $5,000
- Annual interest rate = 12% → Monthly rate (r) = 12 / 12 / 100 = 0.01
- Tenure = 10 years → n = 10 × 12 = 120 months
Plugging into the formula:
FV = 5000 × [(3.30039 - 1) × 1.01] / 0.01 = $11,61,695 (approx.)
So, your total invested amount = $5,000 × 120 = $6,00,000. Your estimated return = $11,61,695 - $6,00,000 = $5,61,695.
Benefits of Using a SIP Calculator
- Accurate Forecast: Get a precise estimate of your future wealth.
- Quick Comparison: Compare different SIP amounts, durations, and returns.
- Goal Planning: Helps you set realistic financial goals based on output.
- Instant Results: Avoid complex math and manual errors.
- Visual Clarity: Understand how your money grows over time.
Who Should Use the SIP Calculator?
- First-time investors planning their savings strategy
- Experienced mutual fund investors assessing new investments
- Financial planners calculating goal-based investments
- Anyone aiming to understand compound growth via SIP
Factors That Influence SIP Returns
- Investment Amount: Larger SIPs yield higher maturity values.
- Investment Duration: Longer durations allow compounding to work better.
- Expected Rate of Return: Higher interest rates grow investments faster.
- Market Performance: Real-world returns may vary due to market conditions.
How to Use GuideCalculator's SIP Calculator?
- Enter the monthly investment amount you wish to contribute.
- Select the expected annual return percentage.
- Choose the investment duration in years.
- Get instant results: Maturity Value, Total Investment, and Returns.
Advantages of Investing via SIP
- Disciplined Saving: Forces regular saving habits.
- Rupee Cost Averaging: Reduces the impact of market volatility.
- Power of Compounding: Longer investments multiply over time.
- Flexibility: SIPs can be started, paused, or modified anytime.
- Affordable: Start with as low as $500 per month.
Can SIPs Make You a Crorepati?
Yes! Investing $10,000/month for 20 years at 12% returns can grow to over $1 crore. SIPs are a powerful tool to achieve long-term financial goals such as retirement, children's education, or buying a home.
Frequently Asked Questions
1. What is the minimum amount to start SIP?
You can start SIPs with as low as $500/month in most mutual fund schemes.
2. Are SIP returns guaranteed?
No. SIP returns depend on the mutual fund’s performance and market conditions. However, long-term investments generally yield stable returns.
3. Can I increase my SIP amount?
Yes, many platforms allow you to increase your SIP via top-ups or step-up SIP features periodically.
4. Can I stop my SIP in between?
Yes, SIPs are flexible. You can stop, pause, or restart them anytime without penalties.
5. Which is better — SIP or lump sum investment?
SIP is ideal for salaried individuals with regular income. It reduces market timing risk and suits long-term goals. Lump sum is preferable during market corrections or when you have idle funds.
Tax Benefits on SIP
SIPs in ELSS (Equity Linked Saving Scheme) mutual funds qualify for tax deductions under Section 80C of the Income Tax Act up to $1.5 lakh per year. However, gains are subject to capital gains tax.
How to Plan SIP for Your Financial Goal?
To plan SIP for a target corpus (e.g. $50 lakhs in 15 years), reverse-calculate using expected returns to determine monthly investment needed. Our SIP calculator makes this easier.
SIP vs RD – What's the Difference?
| Feature | SIP | Recurring Deposit |
|---|---|---|
| Investment Type | Mutual Funds | Bank Deposit |
| Returns | Market-linked (~10–15%) | Fixed (~5–7%) |
| Risk | Moderate | Low |
| Liquidity | Easy to redeem | Penalty on early withdrawal |
Why SIP is Ideal for Long-Term Wealth Creation
A SIP is one of the most effective tools for long-term wealth accumulation. Unlike market timing or one-time investments, SIPs offer the benefit of consistency and allow investors to ride through market ups and downs. This strategy is particularly effective due to the concept of rupee cost averaging — where an investor buys more units when the market is low and fewer when it's high. Over the long term, this averages the cost of units and improves returns. In addition, the power of compounding significantly boosts wealth. For instance, investing $10,000/month for 25 years at an average return of 12% can result in a corpus exceeding $1.5 crores. This is possible because returns start generating their own returns — a snowball effect. Moreover, SIPs make it easier for salaried individuals to allocate a small portion of their monthly income without the pressure of bulk investment. SIPs also encourage financial discipline and are perfect for long-term goals like retirement, children’s education, or buying a house. Since mutual funds offer a wide range of schemes from low to high risk, investors can choose a fund that matches their risk appetite and time horizon. Whether you're just starting your investment journey or diversifying your portfolio, SIPs bring balance, automation, and growth potential.
Top Mutual Fund Categories for SIP
| Fund Category | Risk Level | Ideal Tenure | Average Return (%) | Use Case | Liquidity | Tax Implication |
|---|---|---|---|---|---|---|
| Large Cap Funds | Moderate | 5+ years | 10-12% | Wealth Creation | High | LTCG @10% |
| Mid Cap Funds | Moderately High | 7+ years | 12-15% | Long-Term Growth | High | LTCG @10% |
| Small Cap Funds | High | 8+ years | 14-17% | Aggressive Investors | High | LTCG @10% |
| ELSS Funds | Moderate | 3+ years | 10-12% | Tax Saving | Medium | 80C + LTCG |
| Index Funds | Low to Moderate | 5+ years | 8-11% | Passive Investors | High | LTCG @10% |
| Balanced Funds | Moderate | 4+ years | 9-12% | Stable Growth | High | LTCG @10% |
| Debt Funds | Low | 1–3 years | 6–8% | Short-term Goals | High | Taxed as per slab |
How SIP Compares to Other Investment Options
SIPs are often compared with other traditional instruments like recurring deposits, fixed deposits, and PPF. While these options provide guaranteed returns, they lag behind mutual fund SIPs in terms of return potential. Fixed income instruments are safer but typically offer 5–7% returns, often below the inflation rate. In contrast, SIPs in equity mutual funds historically generate 10–15% returns annually, thus helping preserve and grow wealth. Additionally, SIPs are highly liquid — you can redeem your investment partially or fully without heavy penalties (unless in a lock-in fund like ELSS). SIPs also offer more transparency, with NAVs published daily, and funds regulated by SEBI. Moreover, mutual fund SIPs allow diversification across sectors and themes, reducing portfolio risk. Another plus is that SIPs are flexible — you can pause, increase, or decrease your contributions as needed. They also offer a psychological benefit — since you're investing monthly, you’re less emotionally tied to short-term market movements. In contrast, lump sum investing requires optimal market timing, which can be challenging. SIPs democratize investing and are suitable for beginners and seasoned investors alike.
SIP Performance Over Different Time Horizons
| Duration | Monthly SIP ($) | Annual Return | Total Invested | Maturity Value | Profit Earned | Wealth Multiplier |
|---|---|---|---|---|---|---|
| 5 Years | 5,000 | 12% | 3,00,000 | 4,10,000 | 1,10,000 | 1.36x |
| 10 Years | 5,000 | 12% | 6,00,000 | 11,61,695 | 5,61,695 | 1.93x |
| 15 Years | 5,000 | 12% | 9,00,000 | 23,48,000 | 14,48,000 | 2.6x |
| 20 Years | 5,000 | 12% | 12,00,000 | 40,88,000 | 28,88,000 | 3.4x |
| 25 Years | 5,000 | 12% | 15,00,000 | 67,62,000 | 52,62,000 | 4.5x |
| 30 Years | 5,000 | 12% | 18,00,000 | 1,06,12,000 | 88,12,000 | 5.9x |
| 35 Years | 5,000 | 12% | 21,00,000 | 1,64,32,000 | 1,43,32,000 | 7.8x |
Common Mistakes to Avoid in SIP Investment
While SIPs are simple, certain missteps can affect your returns. One common mistake is stopping SIPs during market downturns. This is the time when more units are purchased at lower NAVs, setting you up for higher returns when markets recover. Another issue is choosing funds solely based on past performance — always check consistency, fund manager experience, and portfolio allocation. Avoid spreading your investments across too many SIPs as it dilutes focus and complicates tracking. Additionally, not aligning SIPs with financial goals can lead to inadequate corpus at the time of need. Many investors also forget to review SIPs annually — it's essential to increase your SIP as income rises. Ignoring tax implications is another mistake. For example, ELSS SIPs have a 3-year lock-in per installment. Lastly, premature withdrawals break the compounding cycle. Discipline and goal alignment are key to maximizing SIP returns. Use the SIP Calculator regularly to tweak your inputs and ensure you’re on track.
Monthly SIP to Achieve Popular Financial Goals
| Goal | Target Amount | Time Horizon | Expected Return | Required Monthly SIP | Total Investment | Estimated Gain |
|---|---|---|---|---|---|---|
| Child’s Education | $25 Lakhs | 15 Years | 12% | $4,900 | $8.82 Lakhs | $16.18 Lakhs |
| Retirement Corpus | $1 Crore | 25 Years | 12% | $5,100 | $15.3 Lakhs | $84.7 Lakhs |
| Buy a Car | $10 Lakhs | 7 Years | 10% | $8,500 | $7.14 Lakhs | $2.86 Lakhs |
| Downpayment for Home | $20 Lakhs | 10 Years | 11% | $8,200 | $9.84 Lakhs | $10.16 Lakhs |
| Travel Abroad | $5 Lakhs | 5 Years | 12% | $6,600 | $3.96 Lakhs | $1.04 Lakhs |
| Emergency Fund | $3 Lakhs | 3 Years | 8% | $7,600 | $2.74 Lakhs | $26,000 |
| Wedding | $15 Lakhs | 8 Years | 11% | $11,000 | $10.56 Lakhs | $4.44 Lakhs |
Conclusion
SIP is a powerful investment strategy for building long-term wealth. It’s simple, disciplined, and benefits from the power of compounding. Whether you're planning for retirement, education, or financial freedom, SIPs can help you get there — and our SIP Calculator helps you estimate your journey accurately.
Try different combinations of investment amounts, durations, and expected returns using the calculator above. Plan smart, invest regularly, and watch your money grow!