SIP (Systematic Investment Plan) Calculator

Monthly Investment

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Expected Return Rate (% p.a.)

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Investment Period (Years)

Yrs

Understanding Systematic Investment Plans (SIP)

What is a SIP?

A Systematic Investment Plan (SIP) is a method of investing a fixed sum of money in mutual funds at regular intervals, typically monthly. It is a disciplined approach to investing that helps you build wealth over the long term through the power of compounding and rupee cost averaging.

How is SIP Maturity Calculated?

This calculator uses the future value of an annuity formula to project your maturity amount. The formula assumes your SIP contribution is made at the beginning of each month.

• Formula Used:
  M = P * [((1 + i)^n - 1) / i] * (1 + i)
• M = Maturity Value
• P = Monthly Investment Amount
• i = Monthly Interest Rate (Annual Rate / 12 / 100)
• n = Tenure in Months (Years * 12)

Frequently Asked Questions (FAQs)

What is rupee cost averaging?

When you invest via SIP, your fixed monthly investment buys more mutual fund units when the market price is low and fewer units when the market price is high. This automatically averages out your overall cost per unit over time, reducing the impact of market volatility and the risk of "timing the market."

Is SIP better than a lumpsum investment?

SIPs are generally considered less risky for beginners and salaried individuals as they average out the purchase cost over time and build discipline. Lumpsum investments (investing a large amount at once) can yield higher returns if timed correctly in the market, but also carry higher risk. You can compare both using our Investment Comparison tool.