What is a SIP?
A Systematic Investment Plan (SIP) is a way of investing a fixed amount into a mutual fund at regular intervals — usually monthly — instead of investing a lump sum at once. Each instalment buys units at that day's price, so the average cost you pay over time smooths out, rather than depending on getting one day's market level right.
How this calculator works
The maturity value of a SIP is calculated with the standard future-value-of-annuity formula, applied monthly:
Maturity value = P × [ ((1 + i)n − 1) / i ] × (1 + i)
where P is your monthly investment, i is the expected annual return divided by 12 and by 100, and n is the number of months (years × 12).
where P is your monthly investment, i is the expected annual return divided by 12 and by 100, and n is the number of months (years × 12).
Total amount invested is simply P × n. Estimated returns is the difference between the maturity value and the total invested — the part attributed to compounding growth rather than your own contributions.
What this calculator assumes
- The annual return you enter is treated as constant and compounded monthly for the entire period — real fund returns move up and down.
- Every instalment is assumed to be paid on time, for the full duration, with no missed months or early withdrawals.
- The figures shown are before tax. Capital gains tax on equity mutual funds applies on withdrawal and is not deducted here.
- Expense ratios, exit loads and other fund-specific charges are not factored in.
A reasonable return assumption is not a guaranteed one. 12% is a commonly used illustrative figure for long-term equity mutual funds in India, but past performance never guarantees future results. Use a range of return assumptions — conservative and optimistic — rather than anchoring on a single number.