What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is a disciplined approach to investing where you invest a fixed amount regularly (usually monthly) into mutual funds or other investment vehicles. It's one of the most popular ways to build wealth over time through the power of compounding and rupee cost averaging.
Unlike a lump sum investment, SIP allows you to invest smaller amounts regularly, making it easier to start investing even with limited savings. Over time, your monthly contributions compound and grow significantly, especially with step-up SIP options.
Rupee Cost Averaging
Buy more units when markets are low and fewer when high, averaging your purchase cost
Disciplined Investing
Automated monthly investments remove emotional decision-making
Power of Compounding
Your returns earn returns, creating exponential growth over decades
Step-up Growth
Increase SIP annually to match salary growth and beat inflation
SIP is commonly used for:
- Equity Mutual Funds — Long-term wealth creation (10-15% expected returns)
- Debt Funds — Stable returns with lower risk (6-8% expected returns)
- Index Funds — Low-cost market tracking with automatic diversification
- Retirement Planning — Building a corpus over 20-30 years through consistent investing
How to Use This Calculator
It's simple — enter your SIP details and see how your money grows over time. Here's what each field does:
Enter Monthly SIP Amount
How much can you invest every month? Even small amounts like ₹1,000 or ₹5,000 can grow significantly over time.
Tip: Start with what you can afford consistently. You can always increase later.
Set Expected Annual Return
What returns do you expect from your investment? Equity funds typically give 10-15% over long periods.
Tip: Be conservative with estimates. Use 10-12% for equity, 6-8% for debt funds.
Set Your Investment Duration
How long will you continue investing? Longer durations amplify the compounding effect dramatically.
Tip: SIP works best for 5+ years. For 10-20 years, the results can be life-changing.
Add Step-up Percentage (Optional)
Will you increase your SIP annually? This matches salary growth and accelerates wealth building.
Tip: 10-15% annual step-up is common. Even 5% makes a significant difference over 20 years.
Set Inflation Rate (Optional)
What's the expected inflation? This shows the real purchasing power of your future corpus.
Tip: 6-7% is a reasonable estimate for long-term inflation in most economies.
Choose Compound Frequency
How often are returns compounded? Daily for savings accounts, monthly for mutual funds, quarterly for bank FDs, yearly for bonds.
Tip: Monthly is most accurate for equity SIPs. Use yearly for conservative estimates.
View Your Results
See your total invested, maturity value, returns, and detailed year-by-year breakdown instantly.
Tip: Compare with and without step-up to see the impact of increasing your SIP.
What You Get
Charts: Visual breakdown of investment vs returns growth
Year-by-Year Table: See exactly how your portfolio grows
Inflation Adjusted: What your money will actually buy
Step-up Impact: See how increasing SIP boosts returns
Multiple Currencies: USD, EUR, GBP, INR, JPY
Real-time: Results update as you type
SIP Formula
The SIP future value formula calculates how much your regular monthly investments will grow over time with compound interest:
Where:
The total maturity amount at the end of the investment period
The fixed amount you invest every month
Annual return ÷ compound frequency (e.g., 12% annual with monthly compounding = 1% per period)
Total number of monthly SIP payments (years × 12)
Step-up SIP Formula
When you increase your SIP amount annually by a fixed percentage, the calculation becomes more complex. For each year, the SIP amount is:
Where is the annual step-up rate (e.g., 10% = 0.10). For example, with ₹10,000 initial SIP and 10% step-up:
- Year 1: ₹10,000/month
- Year 2: ₹11,000/month
- Year 3: ₹12,100/month
Compound Frequency
The compounding frequency determines how often your returns are reinvested. More frequent compounding yields higher returns:
Savings accounts, money market funds. Highest effective yield.
Mutual funds, equity SIPs. Most common for investments.
Bank FDs, recurring deposits. Standard bank products.
Bonds, conservative estimates. Lowest effective yield.
For example, 12% annual return with different frequencies on ₹1 lakh over 10 years:
- Yearly: ₹3.11 lakhs
- Quarterly: ₹3.26 lakhs
- Monthly: ₹3.30 lakhs
- Daily: ₹3.32 lakhs
Inflation-Adjusted Value
To find the real purchasing power of your future corpus in today's money:
Where is the annual inflation rate and is the number of years. This shows what your future corpus will actually be worth in today's purchasing power.