SIP Calculator

How a SIP grows your money

A systematic investment plan works by committing a fixed sum—say, $5,000—to a fund every month rather than investing one large amount at once. Each deposit buys units at that month's price, so over time you naturally average your purchase cost across market ups and downs, a behavior often called rupee-cost or dollar-cost averaging. Mathematically, a long run of equal monthly deposits compounding at a steady rate behaves like an annuity: every contribution keeps earning returns from the month it lands until the end of your investment horizon, and earlier deposits have more time to compound than later ones.

The future-value-of-an-annuity formula explained

This calculator uses the future value of an annuity-due: FV = P × [((1 + i)^n − 1) / i] × (1 + i). Here P is your monthly contribution, i is the monthly return rate (your expected annual return divided by 100 and by 12), and n is the total number of monthly deposits (years × 12). The trailing (1 + i) factor reflects an annuity due—deposits made at the start of each month, which is how most SIPs are scheduled—so every contribution earns one extra month of growth compared with an ordinary annuity where deposits land at month-end. When the expected return is exactly 0%, the compounding term collapses and the formula safely reduces to FV = P × n, avoiding any division by zero. Total invested is simply P × n, and estimated wealth gained is the difference between the maturity value and that total.

Worked example — investing 5,000 per month at 12% for 10 years

Suppose you invest $5,000 every month for 10 years (n = 120 deposits) at an expected annual return of 12% (a monthly rate i ≈ 0.01). Plugging those numbers into the annuity-due formula produces total contributions of $600,000 and a projected maturity value of roughly $1,160,000—nearly double the amount you actually put in, with the rest coming from compounding alone. That gap between what you contribute and what you end up with is the entire point of starting early: the earliest deposits get the most months to compound, so the difference widens dramatically the longer you stay invested. Try the calculator with your own numbers above to see the exact maturity value, total invested, and estimated wealth gained for your situation; small changes to the rate or the time horizon can move the ending figure by a wide margin, which is exactly why the assumptions you enter matter so much.

SIP vs lump sum (link to compound interest calculator)

A SIP spreads your investment across many months, which smooths out the price you pay for fund units and reduces the risk of investing everything right before a downturn. A lump-sum investment, by contrast, puts the full amount to work immediately, which can outperform a SIP in a steadily rising market but exposes you to more timing risk. If you have a single deposit to model rather than a recurring monthly contribution, use our compound interest calculator instead—it is built specifically for one starting balance compounding over time.

Step-up SIP and why it matters

A step-up SIP increases your monthly contribution by a fixed percentage every year, often timed to match an annual raise. Because later, larger contributions still have years left to compound, even a modest step-up—5% or 10% a year—can meaningfully lift your maturity value over a long horizon compared with keeping the same fixed amount throughout. Enter a step-up percentage above to see how escalating your monthly investment changes the projected outcome; leave it at 0% to model a flat, unchanging contribution.

How to read your results (maturity, invested, wealth gained)

Maturity value is the projected total your investment could be worth at the end of the period, combining your own deposits with compounded returns. Total invested is simply the sum of every monthly contribution you made (adjusted for any step-up), with no growth applied—it is your own money, dollar for dollar. Estimated wealth gained is the difference between the two: the portion of the maturity value that came from compounding rather than from your own pocket. Return on investment expresses that gain as a percentage of what you put in, giving you a quick sense of how much your contributions multiplied over the chosen horizon.

Disclaimer — estimate only, not financial advice, returns not guaranteed

This calculator is for educational and planning purposes only and is not financial advice. It assumes a constant monthly deposit (or a fixed annual step-up), a constant expected return compounded monthly, and contributions made at the start of each period. It does not model fund expense ratios, exit loads, capital gains taxes, or inflation, and market-linked returns are never guaranteed—actual outcomes can be higher or lower than what you enter here. Always read fund documents carefully and consider speaking with a licensed financial advisor before making investment decisions.