What is the SIP Calculator?
A Systematic Investment Plan (SIP) is a method of investing an amount at regular intervals. This calculator estimates the future value of equal monthly contributions under a return assumption and investment horizon that you enter.
The output is an illustration, not a forecast. Actual investment values can rise or fall, and returns may vary materially from month to month. The calculator applies one constant rate throughout the projection and does not select a fund, platform, product, or portfolio allocation.
How does it work?
The SIP calculator uses the future value of a recurring annuity formula: M = P × [(1 + r)^n – 1] / r × (1 + r), where M is the maturity amount, P is the monthly SIP instalment, r is the monthly rate of return (annual rate divided by 12), and n is the total number of instalments (years × 12). The final multiplication by (1 + r) accounts for the fact that SIP instalments are invested at the beginning of each period, making it an annuity-due rather than an ordinary annuity.
Treat the entered annual rate as a planning return assumption. There is no single reliable future return rate: use different scenarios and do not interpret one assumed rate as an expected market outcome. The engine converts the entered annual assumption to a monthly rate by dividing it by 12 and applies that same rate every month.
The optional tax input applies the entered percentage directly to the calculator's modeled gain. It does not determine tax from your actual fund type, purchase lots, holding periods, exemptions, regime, or redemption history. The optional inflation input discounts the projected post-tax value by the entered constant inflation assumption.
Worked example
Enter a monthly contribution of ₹10,000, an 11% annual return assumption, and a 10-year horizon. Using an 11% annual return assumption for illustration, the calculator treats each contribution as occurring at the beginning of the month and projects ₹21,89,873. Total contributions are ₹12,00,000, so the modeled gain is ₹9,89,873.
The result assumes the same return every month. It does not model changing market returns, fees, fund selection, contribution increases, or actual tax treatment.
When to use this calculator
- 1Project equal monthly contributions over a selected number of years.
- 2Compare how changing the monthly contribution affects the illustrated future value.
- 3Test lower, base, and higher return assumptions without treating any scenario as a forecast.
- 4Estimate the effect of an entered inflation or flat tax-on-gains assumption on the displayed value.
Common mistakes to avoid
- ✕Treating the planning return assumption as a forecast. Actual market returns vary and the illustrated corpus may not be achieved.
- ✕Assuming the result models market volatility. The calculator applies one constant monthly rate and does not model the order of gains and losses.
- ✕Reading the optional tax result as an actual tax calculation. It is only the entered flat percentage applied to modeled gains.
- ✕Assuming annual contribution increases are included. The basic SIP calculator keeps the monthly amount unchanged for the entire horizon.
- ✕Using a nominal projection as today's purchasing power without entering an inflation assumption.
Frequently asked questions
- Does this calculator determine the tax on my SIP gains?
- No. The optional tax input applies one percentage to the modeled gain. Tax is not automatically determined from your actual fund holdings, purchase dates, holding periods, exemptions, or redemption history.
- What return rate should I enter?
- There is no single reliable future return rate. Choose rates for scenario testing and compare lower, base, and higher assumptions rather than treating one value as a forecast. Actual market returns can be materially higher or lower.
- What is the minimum SIP amount?
- Minimum contribution amounts depend on the selected fund and service provider. Check the current scheme documents and provider terms before investing; this calculator does not verify minimums.
- How do SIPs, PPF, and NPS differ?
- A mutual-fund SIP is a recurring investment method and its value is market-linked. PPF is a government small-savings scheme with a periodically notified rate and scheme-specific tenure and access rules. NPS is retirement-focused, has contribution, withdrawal, and tax rules, and its investment value is market-linked. These products have different rules, risks, liquidity, and tax treatment. The calculator does not recommend an allocation.
- What happens when the NAV falls?
- A lower NAV means the current market value per unit is lower. A fixed SIP buys more units when NAV is lower and fewer when it is higher, but this does not ensure a profit or recovery. This calculator does not model changing NAVs or varying monthly returns.
- Can this calculator model an increasing SIP?
- No. The basic SIP calculator uses the same monthly contribution throughout the projection. To test increasing contributions over time, use the Step-Up SIP Calculator.