Free SIP Calculator
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Pick a monthly amount, an expected return, and a horizon. We compound month-by-month and show how invested + returns sum to your final corpus.
Total Invested
$120,000.00
500/mo × 240 months
Returns
$379,573.96
Final Corpus
$499,573.96
Year-by-year buildup
Stacked: dark = your contributions, green = compound returns.
What is a SIP?
A SIP (Systematic Investment Plan) is a way to invest the same fixed amount on a regular schedule, usually monthly. Most people use SIPs to buy mutual fund or ETF units. Each month, your contribution buys whatever units the current price allows. Over time, this averages out your entry price (rupee-cost averaging or dollar-cost averaging, depending on where you live).
The appeal is consistency. You don't need to time the market, you don't need to invest a lump sum upfront, and small amounts compound into real wealth over decades. A $500 monthly SIP at 12% per year grows to roughly $5 million over 35 years. The math is unforgiving in both directions, so the assumed rate matters a lot.
How to calculate SIP returns manually
SIP returns use the future-value-of-annuity formula. With monthly contribution P, monthly rate r (annual rate ÷ 12, as a decimal), and tenure n months:
Worked example: $500 invested monthly at 12% annual return for 20 years. Monthly rate r = 0.12 ÷ 12 = 0.01. Tenure n = 240. FV = 500 × [((1.01)240 − 1) ÷ 0.01] × 1.01 ≈ $498,000. You contributed $120,000 over those 20 years. The remaining $378,000 is compound growth on contributions that arrived at different times. Move the sliders above to see how rate or horizon changes the final number.
Real-world examples
Starter SIP
$200/mo · 10% · 25 years
≈ $266,000 · invested $60,000
Small monthly contributions started young. The vast majority of the final balance is compound growth, not the money you put in.
Mid-career SIP
$1,000/mo · 12% · 20 years
≈ $996,000 · invested $240,000
A SIP started at 40 still reaches a million by 60 at equity-fund returns. Roughly $750,000 of that is growth.
Step-up SIP
$500/mo + 10%/yr · 12% · 25 years
≈ $1.96M · invested $590,000
Increase your monthly amount by 10% each year. The compounding plus rising contributions roughly triples the unstepped result.
Common mistakes when projecting SIP returns
- Assuming returns are constant. Equity funds don't return 12% every year. They average that over decades, with individual years swinging from −30% to +40%. The SIP formula uses an average rate. Reality is bumpier.
- Forgetting inflation. A 12% nominal return at 6% inflation is really 6% in real purchasing power. For long horizons, run the math in real returns or you'll over-project by 50% or more.
- Skipping the step-up. Your income usually grows. If your SIP doesn't grow with it, you're effectively saving a shrinking share of income. A 5–10% annual step-up roughly doubles the final corpus.
- Ignoring expense ratios. A 1% fund expense ratio compounded over 25 years quietly eats roughly 20% of your final balance. Pick low-cost index funds unless you have a specific reason to pay more.
- Stopping the SIP in a crash. The worst time to stop a SIP is when prices are down. That's exactly when each contribution buys more units. Investors who paused in 2008 missed the best entry point of the decade.
Step-up SIPs — adding a yearly raise to your contribution
This calculator models a flat SIP. In real life, your salary typically grows 5–10% per year — and your SIP should grow with it. A step-up SIP bumps the monthly amount by a fixed percentage each year. The corpus impact is dramatic.
A ₹10,000/month flat SIP at 12% for 20 years lands around ₹99 lakh. The same SIP with a 10% annual step-up lands around ₹2.5 crore — over 2.5× the corpus, simply because each year's extra contribution gets to compound for the remaining years.
To approximate a step-up here, run the calculator with the average of your starting and ending monthly amounts.
SIP vs lump-sum — when each wins
In a steadily rising market, lump-sum wins. More money is invested earlier, so more units enjoy the full compounding period. Roughly two-thirds of historical bull-market windows favour lump-sum over SIP.
SIPs win when the market is choppy or falling for an extended period. Each monthly buy gets a different price, and the lower prices buy more units. They also win behaviourally — flat recurring contributions remove the "is this the top?" decision from every payday.
The pragmatic answer for most retail investors: if you have a year of savings sitting in cash, deploy it gradually over 6–12 months rather than all at once. You sacrifice a small expected return for a large reduction in regret.
Tax treatment by jurisdiction
- India: ELSS mutual funds qualify for a ₹1.5 lakh deduction under Section 80C. Long-term capital gains (after 1 year) over ₹1 lakh are taxed at 10%.
- US: contributions to a 401(k) or traditional IRA are pre-tax up to the annual limit ($23k for 401k in 2025, $7k for IRA). Roth versions tax now, withdraw tax-free.
- UK:ISAs let you shelter up to £20k/year of contributions with completely tax-free growth and withdrawals. Stocks & Shares ISA is the closest UK analogue to a SIP.
Pre-tax compounding inside a sheltered account dramatically beats post-tax compounding in a brokerage account. If your country offers a sheltered wrapper, max it before opening a taxable SIP.
Frequently asked questions
- A Systematic Investment Plan is a way of investing a fixed amount at a fixed interval — typically monthly — into a mutual fund or index fund. SIPs smooth out market timing and leverage rupee/dollar-cost averaging.
- Compound returns. Money you invested in year 1 has 30 years to grow; money in year 30 has only one. The 'returns' bar dwarfs the 'invested' bar at long horizons because the early dollars do the heaviest lifting.
- Indian large-cap mutual funds have averaged ~12% over long horizons; US S&P 500 around 10% nominal. Don't extrapolate the last 3 years — pick a humble number (8–12%) so you're not disappointed.
- Yes — even small step-ups (5–10% per year matched to your raises) significantly improve outcomes because the additional amounts also compound. This calculator models a flat SIP; for step-ups, mentally bump the monthly amount.
- The math works for any monthly contribution that compounds at a known rate. But crypto returns are far more volatile, so any single rate badly underestimates the range of outcomes. Treat the result as one scenario, not a prediction.
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