What is a SIP?
A Systematic Investment Plan, or SIP, is a way of investing a fixed amount of money at regular intervals, usually every month, into a mutual fund. Instead of trying to time the market with a single large investment, you invest steadily over time. This spreads your purchases across different market levels, a benefit known as rupee-cost averaging, and lets the power of compounding work on your money for longer.
How does this SIP calculator work?
The calculator takes three inputs: your monthly investment, the annual return you expect, and the number of years you plan to invest. It then compounds each monthly contribution forward to the end of the period and adds them together. The result is split into two parts: the total amount you actually invested, and the estimated returns generated on top of it. Switch on step-up SIP to grow your monthly amount by a set percentage every year.
The SIP formula
The future value of a SIP is calculated with the future value of an annuity formula:
M = P × ( ( [1 + i]ⁿ − 1 ) / i ) × ( 1 + i )
- M is the maturity amount you receive.
- P is the amount you invest each month.
- i is the monthly rate of return (annual rate ÷ 12 ÷ 100).
- n is the total number of monthly instalments.
A worked example
Suppose you invest ₹25,000 every month for 15 years at an expected return of 12% per year. Over those 15 years you contribute ₹45 lakh of your own money. At a constant 12% annual return, that SIP could grow to roughly ₹1.26 crore, meaning your estimated returns of about ₹81 lakh would exceed what you put in. That gap is the effect of compounding over time. Adjust the sliders above to see how the numbers change for your own plan.
SIP vs lumpsum
A SIP invests a fixed amount at regular intervals, which suits investors building wealth from a monthly income and smooths out the effect of market ups and downs. A lumpsum invests the entire amount in one go, which can work well when you have a one-time surplus and a long horizon. Many investors use both: a steady SIP for discipline, topped up with lumpsums when they have extra cash.
Frequently asked questions
What is a SIP calculator?+
A SIP calculator is a free online tool that estimates how much your monthly SIP (Systematic Investment Plan) could grow to over time. You enter your monthly investment, an expected annual return rate, and the number of years, and it instantly shows your total invested amount, estimated returns, and the projected maturity value.
How is SIP return calculated?+
SIP returns are calculated using the future value of an annuity formula: M = P × ({[1 + i]^n - 1} / i) × (1 + i), where P is the monthly investment, i is the monthly rate of return (annual rate divided by 12), and n is the total number of monthly instalments. The calculator runs this for every contribution and adds them up.
What is the SIP formula?+
The SIP maturity formula is M = P × ({[1 + i]^n - 1} / i) × (1 + i). Here M is the maturity amount, P is the amount invested each month, i is the periodic (monthly) rate of interest, and n is the number of payments. For example, a 12% annual return means i = 12/12/100 = 0.01 per month.
What is a step-up SIP?+
A step-up (or top-up) SIP automatically increases your monthly contribution by a fixed percentage every year, usually in line with your rising income. Because you invest more in later years and that money also compounds, a step-up SIP can grow your corpus significantly faster than a flat SIP. Turn on the step-up toggle in the calculator to model this.
Are the returns shown by a SIP calculator guaranteed?+
No. A SIP calculator shows an illustrative estimate based on a constant expected return that you choose. Actual market returns vary year to year and are not guaranteed. The tool is for education and planning only; it is not investment advice or a promise of returns.
What is a good expected return rate to use?+
It depends on what you invest in. Many investors model equity mutual funds at roughly 10% to 12% per year over the long term, debt funds lower, and hybrid funds in between. These are long-term averages, not guarantees. Use a conservative figure and run a few scenarios to see a realistic range.
Can I calculate SIP for any amount and duration?+
Yes. This calculator supports monthly investments from ₹500 up to ₹5,00,000, expected returns from 1% to 30% per year, and durations from 1 to 40 years, with an optional annual step-up. Adjust the sliders to match your own plan.
What is the difference between SIP and lumpsum?+
In a SIP you invest a fixed amount at regular intervals (usually monthly), which spreads your entry across market levels and benefits from rupee-cost averaging. In a lumpsum you invest the whole amount at once. SIPs suit investors building wealth from regular income; lumpsums suit one-time surpluses.
About StoneBridge Research
StoneBridge is a technology platform for automated, rule-based trading inside your own broker account. This calculator is a free educational tool and is not connected to any StoneBridge product.