SIP Calculator

What is our SIP Calculator?

SIP (Systematic Investment Plan) is one of the most popular forms of investing in mutual funds. Especially in India, salaried individuals often invest in Systematic Investment Plans to build up their wealth slowly and steadily. Essentially you invest a fixed amount each month to allow Compounding to occur over 10, 15 or more years.

SIP calculations can sometimes be difficult to understand. For example, investing ₹5000 per month over 20 years with an annual return of 12% will earn you over ₹50 Lakh. Using our SIP calculator you can clearly see how much you will earn each year.

How to use our SIP Calculator?

Using our SIP calculator is very quick and simple:

1. Select a currency. We support INR (₹), USD ($) or EUR (€) or GBP (£).
2. Enter your monthly investment amount.
3. Enter your expected annual return. This is usually 10-15% for equities in India. This is not guaranteed.
4. Enter your investment period. This can be years and months, months or just years. The longer you invest the greater effect compounding will have.
5. Tick the box for Step-Up SIP. If you would like to increase your monthly SIP each year you can enter a percentage here and we will factor this in.
6. Instant results! You will see your maturity value, total investment, wealth earned and a full table of your growth per year.

Why use our SIP Calculator?

We offer several features that make our SIP calculator stand out from others online:

• Step-Up SIP support. Most SIP calculators only calculate a fixed amount per month. Our calculator allows you to increase your SIP each year.
• Multiple options to enter your investment period. You can enter years and months, months or years.
• Shows the breakdown of your investment per year. It is easy to see how much you are investing and how much your money is growing each year.
• Bar chart to show how much of your investment is your own money and how much is your returns.
• Currency friendly. You can use INR, USD, EUR or GBP. Great for NRIs.
• All calculations are done in your browser. Your financial information will not be stored.

How are our SIP returns calculated?

The SIP maturity calculator uses a compound interest formula:

M = P x [((1+i)^n -1)/i] x (1+i)

Where,

• M = Maturity Value
• P = Monthly Investment
• i = Monthly rate of return (Annual rate divided by 12 then divided by 100)
• n = Number of monthly installments

This assumes that each monthly amount will be invested for the remainder of the SIP period. Therefore the earlier you invest, the more compounding will occur.

If you have a Step-Up SIP, we will calculate your SIP monthly. Each year we increase your monthly SIP by the percentage entered and calculate how much your money will grow until maturity. This means you will get an accurate result.

The Power of Compounding!

Let's look at an example of how much you can earn with SIP investments. Both examples below have an investment of ₹5000 per month with an annual return of 12%.

• 10 Years: Total investment = ₹6,00,000. Maturity Value = ~₹11.6 Lakh. Wealth Earned = ~₹5.6 Lakh.
• 20 Years: Total investment = ₹12,00,000. Maturity Value = ~₹50 Lakh. Wealth Earned = ~₹38 Lakh.
• 30 Years: Total investment = ₹18,00,000. Maturity Value = ~₹1.76 Crore. Wealth Earned = ~₹1.58 Crore.

As you can see, doubling the investment period from 10-20 years, more than quadrupled the amount of wealth earned. From 20-30 years, the wealth earned almost triples! This is the power of compound interest. The most powerful variable in this equation is time.

What is a Step-Up SIP?

A Step-Up SIP (or Top-Up SIP) is when your monthly investment automatically increases by a fixed percentage each year. For example:

• First Year: ₹5000 Monthly
• Second Year: ₹5500 Monthly (10% increase)
• Third Year: ₹6050 Monthly
• Fourth Year: ₹6655 Monthly etc.

This is a great feature as it is likely your salary will increase each year. As your income increases you can increase your investment without feeling the pinch. Over a longer period of time (20-30 years) you will notice a massive difference between a regular SIP and a 10% Step-Up SIP. Often the difference will be 2x or more.

FAQs

What is a SIP?

A Simple Investment Plan (SIP) is when you invest a fixed amount into Mutual Funds on a regular basis. Usually this will be on a monthly basis. Rather than investing a large lump sum, you invest small amounts regularly. This helps to average out market fluctuations using a technique called Rupee Cost Averaging. SIPs are very popular in India and other countries for salaried individuals.

How is SIP maturity calculated?

SIP maturity is calculated using the compound interest formula. The formula is M = P x [((1+i)^n -1)/i] x (1+i). P is the monthly investment amount. I is the monthly rate of return. This is calculated by dividing the annual return by 12 and then dividing by 100. N is the number of monthly installments. Our calculator uses this formula to give you accurate results. We also calculate each month to give you accurate results if you have a Step-Up SIP.

What is a Step-Up SIP?

A Step-Up SIP (Top-Up SIP) allows you to increase your monthly SIP by a fixed percentage each year. For example if you invest ₹5000 monthly and you have a 10% increase, your SIP will increase to ₹5500 in year 2. In year 3 it will increase to ₹6050 etc. This will help you to increase your corpus much quicker.

What rate should I use?

For equities in India, a good long term rate to use will be 10-15%. This is not guaranteed. Debt funds will typically earn 6-8% and Hybrid funds will be somewhere in between. Remember that returns from mutual funds are subject to market risk. We use 12% as a default rate as this is a common figure to use for planning.

Is a SIP better than investing a lump sum?

Both SIPs and lump sums have their benefits. SIPs are great for salaried individuals and help to reduce the risk of investing at the peak of the market. Lump sums can be better in an upward trend but carry higher risk of getting the timing wrong. SIPs also encourage discipline.

Can I stop my SIP?

Yes. SIPs are much more flexible than fixed deposits. You can pause, change or stop your SIP at any point. Your units will still be invested and will continue to grow. However, stopping your SIP may mean you don't get the full benefit from compounding. Especially if you had a short investment period.

Are returns from SIP guaranteed?

No. Returns from SIP are not guaranteed. They completely depend on the performance of the underlying mutual fund. Due to this they are subject to market risk. Just because something has performed well in the past doesn't mean it will perform the same in the future. Our SIP calculator is just a planning tool.

Will my financial information be stored or shared?

No. All our SIP calculations are done using JavaScript in your browser. Your investment amount, expected return and investment period will not be sent to a server or stored anywhere. This is completely private. Even if you lose internet connection, the calculator will still work.

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