SIP Calculator
Plan your investments and calculate future wealth
SIP
Lumpsum
Investment Results
Total Investment
₹6,00,000
Wealth Gained
₹5,86,212
Future Value
₹11,86,212
Absolute Returns
97.7%
Investment Breakdown
50%
50%
Principal
Returns
Growth Projection
Start
25%
50%
75%
End
Max
75%
50%
25%
0
Growth
Investment
Recommended Mutual Funds
Large Cap Funds
For conservative investors seeking stable returns
Mid Cap Funds
For moderate risk with growth potential
ELSS Funds
For tax savings with equity exposure
Index Funds
For low-cost passive investing with market returns
SIP Introduction
A Systematic Investment Plan (SIP) is a disciplined approach to investing where you invest a fixed amount regularly in mutual funds. It's similar to a recurring deposit in a bank but offers potentially higher returns through market-linked investments. SIPs have become one of the most popular investment methods in India for building long-term wealth.
What is SIP?
SIP or Systematic Investment Plan is an investment method that allows you to invest a fixed amount regularly (usually monthly) in mutual funds. This approach helps in averaging the cost of your investments over time, reducing the impact of market volatility. It's perfect for individuals who want to build wealth gradually without timing the market.
How it Works?
When you start a SIP, you commit to investing a fixed amount at regular intervals. Here's how it works:
- You invest a fixed amount regularly (e.g., monthly).
- Your money buys more units when prices are low and fewer units when prices are high.
- This cost averaging helps reduce the impact of market volatility.
- Your investments grow through the power of compounding over time.
The SIP Calculator uses the following formulas to calculate the estimated future value of your investments:
SIP Formula:
FV = P × [ (1 + r)n - 1 ] × (1 + r) ÷ r
Where:
FV = Future Value
P = Monthly investment amount
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Total number of months
Lumpsum Formula:
FV = P × (1 + r)n
Where:
FV = Future Value
P = One-time investment amount
r = Annual interest rate (in decimal, e.g., 12% = 0.12)
n = Number of years
How to Use Our SIP Calculator?
Our SIP calculator is designed to be simple and intuitive. Here's how to use it:
- Choose the investment type (SIP or Lumpsum) by clicking on the appropriate tab.
- For SIP: Enter the monthly investment amount, expected annual return rate, and investment duration in years.
- For Lumpsum: Enter the one-time investment amount, expected annual return rate, and investment duration in years.
- The calculator will instantly compute the results, showing the total investment, wealth gained, future value, and absolute returns.
- Adjust the parameters using sliders or direct input to see how changes affect your investment growth.
Benefits of SIP Investing
SIP investing offers several advantages over other investment methods:
- Rupee Cost Averaging: By investing regularly, you buy more units when prices are low and fewer when prices are high, averaging your purchase cost over time.
- Disciplined Approach: SIPs encourage regular investing, helping you build a disciplined saving habit.
- Power of Compounding: Over time, your investments benefit from compounding, where returns generate additional returns.
- Flexibility: You can start with a small amount and increase it as your income grows, or pause/stop your SIP when needed.
- Reduced Timing Risk: Since you invest regularly, you don't need to time the market, reducing the risk of investing all your money at market peaks.
FAQs
Q: What is the minimum amount required to start a SIP?
A: Most mutual funds allow SIPs starting from ₹500 per month, making it accessible for most investors.
Q: Can I change my SIP amount or stop it temporarily?
A: Yes, most fund houses allow you to modify your SIP amount or pause it temporarily based on your financial situation.
Q: Is SIP better than lumpsum investment?
A: Neither is inherently better; it depends on your financial goals and market conditions. SIPs are generally better for beginners and during volatile markets, while lumpsum might be advantageous during a market downturn if you have the capital.
Q: How realistic are the returns shown in the calculator?
A: The calculator provides estimates based on the inputs you provide. Actual returns may vary based on market performance, scheme selection, and other factors. It's best to use conservative expected returns for your planning.
Q: How long should I continue my SIP?
A: SIPs work best when continued for longer periods (5+ years). The power of compounding increases significantly over longer durations, helping you build substantial wealth.