How the SIP return is calculated
For a monthly SIP the future value is M × ((1 + i)n − 1) ÷ i × (1 + i), where M is the monthly amount, i is the monthly return (annual rate ÷ 12 ÷ 100) and n is the number of months. Each instalment is assumed to be invested at the start of the month.
For a lumpsum the value is P × (1 + r)t, where r is the yearly return and t is the number of years. The longer the money stays invested, the more compounding works for you.
These are projections at a constant return. Real market returns go up and down, so actual results will differ.
Frequently asked questions
What is a SIP?
A Systematic Investment Plan lets you invest a fixed amount in a mutual fund at regular intervals, usually every month. It builds the habit of investing and spreads your purchases over market ups and downs.
What return should I assume?
Nobody can promise a return. Equity funds have moved widely over the years, so many people plan with a conservative figure and compare a few scenarios. Use this tool to see the result at 8%, 10% and 12%.
What is a step-up SIP?
A step-up SIP raises your monthly amount by a fixed percentage every year, for example 10%, as your income grows. Even a small yearly step-up can add a lot to the final value over 15 to 20 years.
SIP or lumpsum: which is better?
A lumpsum invested on day one has more time to compound, but you need the full amount upfront and the entry point matters. A SIP suits regular income and reduces the risk of investing everything at a market high.
Are taxes and charges included?
No. Fund expense ratios, exit loads and capital gains tax are not included, so your actual returns will be lower than the projection.
Is this financial advice?
No. It is an educational estimate. Please read the scheme documents and consider speaking to a registered adviser before investing.
SIP Calculator · sip.technoyes.com