SIP Investment Calculator
Calculate the future value of your Mutual Fund SIP investments
Total Invested Amount:
$0
Estimated Returns:
$0
Total Value:
$0
What is a SIP (Systematic Investment Plan)?
A Systematic Investment Plan (SIP) is a disciplined method of investing in mutual funds. Instead of making a large lump-sum payment, you invest a fixed amount at regular intervals (monthly, quarterly, or weekly). This approach is highly effective for long-term wealth creation as it leverages the power of compounding and rupee cost averaging.
How Does the SIP Calculator Work?
Our SIP calculator uses the future value formula for an annuity due. The calculation takes into account your monthly contribution, the expected annual growth rate, and the duration of your investment.
The Formula: FV = P × [((1 + i)n – 1) / i] × (1 + i)
- P: Monthly investment amount
- i: Periodic rate of interest (Annual rate / 12 / 100)
- n: Total number of payments (Years × 12)
Practical Example of SIP Growth
Let's look at a realistic scenario using the power of time:
- Monthly Investment: $500
- Expected Return: 12% per year
- Duration: 15 Years
In this example, your total investment would be $90,000. However, due to the 12% compounded return, your estimated returns would be approximately $162,288, bringing your total wealth to a staggering $252,288.
Key Benefits of Starting a SIP
- Financial Discipline: Automating your investments ensures you save before you spend.
- Compounding Effect: The earlier you start, the more time your money has to grow exponentially.
- Rupee Cost Averaging: You buy more units when prices are low and fewer units when prices are high, lowering your average cost per unit over time.
- Flexibility: You can start with as little as $10 or $50 depending on the fund, making it accessible for everyone.