SIP Calculator
Investment Details
Investment Summary
Invested Amount
₹12,00,000
Est. Returns
₹11,23,391
Total Value
₹23,23,391
Absolute Returns
93.62%
Lumpsum Equivalent
To get the same ₹23,23,391 in 10 years, you would need to invest ₹7,48,070 as a one-time lumpsum today.
What is SIP (Systematic Investment Plan)?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount regularly in mutual funds. Instead of making a lump sum investment, you invest small amounts at regular intervals (usually monthly), which helps in averaging out the purchase cost and reduces the impact of market volatility.
SIP leverages the power of compounding – where your returns also start earning returns. The longer you stay invested, the more your money grows exponentially. This makes SIP an excellent wealth-building strategy for long-term financial goals like retirement, children's education, or buying a home.
How Does SIP Calculator Work?
The SIP Calculator uses the compound interest formula to calculate the future value of your investments. It considers three main inputs:
- Monthly Investment Amount (P) – The fixed amount you invest every month
- Expected Rate of Return (r) – The annual return you expect from your investment
- Investment Duration (n) – How long you plan to continue investing
SIP Future Value Formula:
FV = P × [(1 + r)ⁿ – 1] / r × (1 + r)
Where: FV = Future Value, P = Monthly Investment, r = Monthly Rate of Return, n = Total Number of Months
Benefits of Investing Through SIP
🎯 Rupee Cost Averaging
Buy more units when prices are low, fewer when high. This averages out your purchase cost over time.
💪 Power of Compounding
Your returns earn returns. The longer you stay invested, the more exponential your growth.
📅 Financial Discipline
Automatic monthly deductions help you build a regular saving habit effortlessly.
🚀 Start Small
You can start with as little as ₹500/month. No need for a large lump sum to begin investing.
📊 Flexibility
Increase, decrease, pause, or stop your SIP anytime based on your financial situation.
🛡️ Reduced Risk
Spreading investments over time reduces the risk of investing at market peaks.
SIP vs Lumpsum Investment
| Aspect | SIP | Lumpsum |
|---|---|---|
| Investment Type | Regular, periodic | One-time, bulk |
| Initial Amount | Small (₹500+) | Large sum required |
| Market Timing | Not required | Important |
| Risk Level | Lower (averaged) | Higher (timing risk) |
| Best For | Salaried individuals | Bonus/inheritance |
Smart SIP Tips
- Start Early: The earlier you start, the more time your money has to grow. Even small amounts can become substantial over 20-30 years.
- Step-Up SIP: Increase your SIP amount by 10% every year to accelerate wealth creation.
- Stay Invested: Don't stop SIP during market downturns – that's when you get more units for the same amount.
- Choose Right Funds: For long-term goals (10+ years), equity funds typically offer better returns than debt funds.