SIP calculator
What a monthly SIP grows to at an assumed return, with an optional yearly step-up, and how much of it is your own money.
Enter the SIP amount, the return you expect and the number of years.
How the SIP value is calculated
A SIP invests the same amount every month. Each instalment then grows for the months left until the end. The calculator adds up those growths. With a monthly rate i (the yearly rate divided by 12 and by 100) and n months, a fixed SIP of P per month, invested at the start of each month, grows to
Value = P × ((1 + i)^n − 1) ÷ i × (1 + i)
This is the same formula the fund houses' calculators use. With a step-up, the instalment rises by the step-up percentage once every 12 months, and the calculator simply runs month by month instead of using the closed formula.
Worked example
Rs 5,000 a month for 10 years at an assumed 12% a year. You invest Rs 6,00,000 in all (5,000 × 120). At 1% a month the value at the end is Rs 11,61,695, so the gain is Rs 5,61,695. The first instalment grows for 120 months and roughly triples; the last one grows for one month and adds only Rs 50. That is why the result is so sensitive to the number of years and so little to when in the month you invest.
What the number is not
- It is not a forecast. The return is a single assumed rate applied evenly. Real funds go up and down, and a SIP's actual return is an XIRR over irregular values, which will differ from the assumption.
- It is before tax. Gains on equity and debt funds are taxed differently, and the rules change with the Finance Act. Check the current rules or your CA before you count the gain as yours.
- It is after the fund's expense ratio only if the return you typed is a net figure. Published fund returns are net of expenses; a broad market index return is not.
- Inflation is not in it. Rs 11.6 lakh in ten years buys less than Rs 11.6 lakh today. To see a goal in today's money, use a lower rate (the assumed return minus your inflation guess).
Step-up SIPs
Raising the SIP by 10% a year turns the same Rs 5,000 start into a much larger sum, because the later, larger instalments still get several years of growth. The total invested rises too, so look at the gain line, not only the final value, when you compare.