SIP Return Calculator
Calculate the future value of your Mutual Fund investments
Invested Amount:
₹0
Estimated Returns:
₹0
Total Value:
₹0
Understanding SIP: How Your Wealth Grows Over Time
A Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds. By investing a fixed amount regularly—monthly or quarterly—you benefit from the power of compounding and rupee cost averaging.
How This SIP Calculator Works
This calculator uses the standard future value formula for an annuity due, which is specifically designed for SIP calculations where payments are made at the beginning of each period.
The SIP Formula:
M = P × ({[1 + i]^n – 1} / i) × (1 + i)
- M: Amount you receive upon maturity.
- P: Amount you invest at regular intervals (Monthly SIP).
- i: Periodic rate of interest (Annual rate / 12 / 100).
- n: Total number of payments (Years × 12).
Benefits of Starting an SIP Early
The primary advantage of an SIP is the Power of Compounding. When you start early, your returns start earning returns of their own. For example, if you invest ₹5,000 monthly at a 12% return for 10 years, your total value is roughly ₹11.6 Lakhs. However, if you extend that same SIP for 20 years, the value doesn't just double; it grows to over ₹50 Lakhs!
Example Calculation:
If you invest ₹10,000 per month for 15 years at an expected return of 15%:
- Total Invested: ₹18,00,000
- Wealth Gained: ₹49,68,695
- Maturity Value: ₹67,68,695
Key Strategies for SIP Investing
- Don't Time the Market: SIP allows you to buy more units when prices are low and fewer when prices are high.
- Increase SIP Yearly: Using a 'Step-up SIP' can help you reach your goals significantly faster.
- Be Patient: Wealth creation happens in the last few years of your investment tenure due to the compounding effect.