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SIP Calculator

Estimate wealth creation via a monthly Systematic Investment Plan. Adjust inputs—see invested vs value growth and yearly breakdown.

Inputs

Provide SIP amount, expected return and duration.

How SIP Compounds

Each month balance grows, then new SIP adds. Gains also compound.

Why Use SIP?
  • Rupee‑cost averaging
  • Start small
  • Compounding
  • Flexible
FAQ
Min?
₹500+.
Duration?
5y+ ideal.
Change?
Usually flexible.
Maturity Value
₹0

Projected corpus given current inputs (tax & fees ignored).

Total Invested
₹0
Total Gain
₹0

i SIP Guide & Information

Expand sections to dive deeper. Educational only – not investment advice. Numbers ignore tax, fees & market volatility.

SIP Calculator Overview

A Systematic Investment Plan (SIP) automates disciplined investing by pulling a fixed rupee amount at a fixed frequency (monthly here) into a mutual fund. This calculator turns those cash flows plus an assumed annual return into a projected future value.

Think of it as reverse‑engineering a compound interest curve made of many small deposits instead of one lump sum.

What is a SIP Calculator?

The engine loops through each month (n = years × 12): grow existing balance by monthly rate, then add the new SIP amount. We summarise the timeline yearly for clarity while preserving math accuracy.

  • Input: Monthly contribution (₹)
  • Input: Expected annual return (%)
  • Input: Duration (years)
  • Outputs: Total invested, total gain, final (maturity) value
Benefits & Use Cases
  1. Goal mapping: Approximate how far your current SIP takes you toward a corpus target.
  2. Adjustment lever: See impact of +₹500 or +1 year immediately.
  3. Discipline cue: Visual curve reinforces staying invested during volatility.
  4. Expectation framing: Distinguish principal vs market‑generated gains.
  5. Conversation aid: Useful when explaining compounding to new investors.
How Compounding Works

Monthly rate (approx): r_m = annual % / 12. (For higher precision one could use (1+r)^(1/12)-1.)

Loop: balance = balance × (1 + r_m) + contribution. Repeated for each month. Gains themselves earn further gains creating an accelerating curve.

Key drivers: start early, stay consistent, step-up amount with income growth, avoid interrupting compounding unnecessarily.

Market returns are lumpy – the real path will zig‑zag around the smoothed projection.

Linear vs Exponential
Compounding path
Linear growth
Picking a Return Assumption
  1. Equity diversified funds (long-term India): often 10–12% conservative assumption.
  2. Debt funds: 6–8% depending on duration & credit risk.
  3. Aggressive thematic/small-cap: Resist using recent cycle highs (can mislead planning).
  4. Always model a lower scenario to stress test plans.
Risks & Caveats
  1. Sequence risk: Poor early years slow compounding pace.
  2. Inflation drag: Nominal growth overstates real purchasing power.
  3. Behavioral risk: Stopping SIPs during downturns locks in underperformance.
  4. Cost impact: Expense ratios reduce net returns (not modelled).
  5. Tax impact: Capital gains tax can lower realised value.
Tax & Cost Considerations

Model ignores taxation. For equity mutual funds in India: units held >12 months usually qualify for long‑term capital gains (LTCG) tax after exemption limit; short‑term gains are taxed at higher rate. Debt fund taxation rules differ (indexation no longer available for many categories).

Expense ratio and possible exit load subtly reduce effective return – incorporate by lowering assumed % a little.

Worked Example

₹5,000 / month for 15 years @ 11% annual (≈0.916% monthly): final corpus ≈ ₹20.8L; invested ₹9.0L; gain ≈ ₹11.8L (≈57% of final value). Extending to 20 years roughly doubles the gain share due to later‑stage compounding acceleration.

Practical Improvement Tips
  1. Upgrade SIP yearly with salary hikes (step‑up strategy).
  2. Avoid timing – keep automated; evaluate annually.
  3. Diversify across styles/market‑caps to smooth variance.
  4. Use conservative return assumptions for planning; celebrate upside.
  5. Track expense ratios; switch persistently underperforming funds prudently.
FAQs
Is monthly rate precise?
We approximate with annual/12; precision tweak is possible but changes output marginally.
Can I target a corpus?
Iteratively adjust contribution or years until maturity ≈ target. (Future feature: goal solver.)
Pause allowed?
Most platforms allow temporary pause; longer breaks reduce final gain disproportionately.
When to increase SIP?
Consider annual step-up aligned with salary increments or inflation.
Multiple SIPs?
Yes; conceptually aggregate all contributions to model a blended plan.