How to use this calculator?
Let’s say you plan to invest ₹5,000 every month through SIP for the next 15 years, and you expect an annual return of 12%. Simply enter:
- Monthly Investment (SIP Amount): ₹5,000
- Investment Period: 15 years
- Expected Annual Return: 12%
The calculator will instantly show your total invested amount, the estimated returns, and the final corpus at the end of the period.
This tool is useful if you’re saving for goals like children’s education, a dream home, or retirement. Just tweak the inputs and see how your future wealth can grow.
SIP calculator
This calculator helps you determine the future value of your monthly investments based on your expected rate of return and time horizon. It gives you a quick picture of how much wealth you can build with consistent investing through SIPs.
Formula used in this Calculator? With explanation
The SIP calculator uses the **Future Value (FV)** formula for recurring investments:
FV = P × [ (1 + r)n – 1 ] × (1 + r) / r
- FV = Future Value (the final amount after investment period)
- P = SIP amount (monthly investment)
- r = Monthly interest rate (annual rate / 12 / 100)
- n = Number of months (investment period × 12)
This formula assumes that each SIP installment is invested at the end of each month and earns compounding returns monthly.
Understanding the benefits:
SIPs are an ideal choice for busy individuals who prefer a “set it and forget it” approach to investing. Once you start, the investment is automated — no need to track the markets constantly. Plus, you invest small, manageable amounts regularly, which makes it suitable even if you’re on a tight budget.
By following a strategy called rupee-cost averaging, SIPs help smooth out market fluctuations over time. This reduces the risk of investing a lump sum during market highs or lows.
SIPs also bring structure to your financial goals. Whether you’re saving for a child’s education, a car, or a peaceful retirement, a SIP can help you plan with discipline and consistency.
However, it’s wise to consult a financial advisor before making any long-term commitments. While SIPs offer convenience and compounding, they still carry market risks depending on the fund you choose.
Disclaimer:
“This article is for educational purposes only. Read our full disclaimer .”