SIP Calculator

Project the compound growth of your Mutual Fund Systematic Investment Plans.

Projections

Invested Amount
Est. Returns
Invested Amount ₹6,00,000
Est. Returns ₹5,20,169
Total Value ₹11,20,169

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Mutual Fund Systematic Investment Plan (SIP) Compound Returns Guide

A Systematic Investment Plan (SIP) is an investment vehicle that allows you to contribute a fixed sum of money regularly (monthly or quarterly) into mutual funds. It promotes financial discipline and leverages the power of compounding to build long-term wealth.

The Math of Compounding in SIPs

SIP growth is determined by compound interest calculated at regular intervals. The mathematical formula for SIP returns is:

M = P x [ ( (1 + i)^n - 1 ) / i ] x (1 + i)
Where:
  • M = Maturity amount.
  • P = Periodic contribution (monthly SIP).
  • i = Monthly interest rate (annual rate / 12 / 100).
  • n = Total number of payments (months).

Benefits of Rupee Cost Averaging

Rupee cost averaging is a key advantage of SIPs. When mutual fund NAVs (prices) are low, your monthly installment buys more units. When prices rise, it buys fewer units. Over time, this averages out your purchase cost, reducing the impact of short-term market volatility and eliminating the need to time the market.

Contextual Personal Finance Tools

To compare your investment growth against the cost of borrowing for major purchases (like home loans), utilize our Loan EMI Calculator. For optimizing your tax liability on mutual fund returns, check out our Income Tax Calculator.

Frequently Asked Questions

What is rupee cost averaging in SIP?
It is an investment strategy where you invest a fixed amount regularly, buying more mutual fund units when prices are low and fewer units when prices are high, averaging out your cost over time.
Can I increase my SIP contribution amount later?
Yes, most mutual funds allow you to set up a step-up SIP, which automatically increases your monthly contribution by a fixed amount or percentage every year.