A SIP (Systematic Investment Plan) calculator helps you estimate the future value of your monthly mutual fund investments using compound interest. It is a planning tool — actual returns will differ based on fund selection, market conditions, and fees.
The Formula Behind SIP Returns
The mathematical formula used by SIP calculators is:
M = P × [((1 + i)ⁿ − 1) / i] × (1 + i)
Where:
M = Maturity amount
P = Regular monthly investment
n = Number of payments (months)
i = Periodic rate of interest (annual rate / 12)
Why scenarios matter
No one can predict market returns. Using three scenarios — conservative (8%), moderate (12%), and aggressive (15%) — gives you a realistic range. Plan for the conservative case; be pleasantly surprised if returns are higher. The inflation-adjusted view shows what your corpus will actually buy in today's money.
Why you should start a SIP early
Because of compounding, the time you stay invested matters far more than the amount. A ₹5,000 monthly SIP started at age 25 will typically outgrow a ₹15,000 SIP started at age 40 — even at the same return rate.