How the SIP Calculator Works
A SIP (Systematic Investment Plan) is a fixed amount invested into a mutual fund every month, rather than a single lump sum. This calculator projects what your SIP could grow into using the standard future-value-of-annuity formula, assuming your expected annual return compounds monthly:
FV = P × [((1 + r)ⁿ − 1) / r] × (1 + r)
Where P is your monthly investment, r is the monthly rate of return (annual rate ÷ 12 ÷ 100), and n is the total number of months (years × 12). The result splits into how much you actually put in (Invested Amount = monthly amount × number of months) versus how much came from compounding growth (Estimated Returns).
This is a projection based on a constant assumed return, not a guarantee — real mutual fund returns fluctuate year to year and this calculator can't predict actual market performance. Use it to compare "what if" scenarios (a higher monthly amount, a longer horizon, a different expected return) rather than as a promise of future returns. Past fund performance and category averages can give you a reasonable range to plug in for the expected return field.
Frequently Asked Questions
What return rate should I use?
There's no way to know future returns in advance. Many investors use long-term historical averages for the fund category they're considering (equity, hybrid, debt) as a rough guide, but actual results can be higher or lower in any given period — treat this as a planning estimate, not a forecast.
Does this account for expense ratios or exit loads?
No — enter your expected return net of fees for a more realistic projection, since fund expense ratios directly reduce the return you actually receive. This calculator also doesn't account for exit loads or capital gains tax on withdrawal.
Is a SIP guaranteed to grow every year?
No. Mutual fund returns are market-linked and can be negative in some years, even if the long-term average is positive. This calculator assumes a smooth, constant annual return for simplicity — real returns are far more variable year to year.