SIP Calculator Explained: What Monthly Investing Could Grow Into
A small monthly investment can grow surprisingly large over time. This guide explains the maths behind a SIP estimate.
What is the SIP Calculator?
This calculator estimates the value of a systematic investment plan, where a fixed amount is invested every month. It uses the future value of monthly payments with monthly compounding, and assumes each payment is made at the start of the month, so it earns interest for that month too. The result shows the maturity value, the total amount invested and the returns on top.
How to use it
- Enter the amount you will invest every month.
- Enter the expected annual return and the investment period in years.
- Press Calculate to see the maturity value, the amount invested and the returns.
Worked example
Invest 500 a month at 12% per year for 10 years. The tool gives a maturity value of 116,169.54, an amount invested of 60,000 and returns of 56,169.54.
How does a SIP grow over time?
Each monthly payment starts earning returns as soon as it is invested, and those returns then earn returns of their own. Because payments are spread over time, later payments have less time to grow than earlier ones. The total maturity value is the sum of all payments plus all the growth they produced together.
Frequently asked questions
What does SIP mean?
It stands for a systematic investment plan: a fixed sum invested at regular intervals, usually monthly, instead of one large lump sum.
Is the expected return guaranteed?
No, market returns go up and down, so the result is an estimate at a steady assumed rate. Use it to compare plans, not as a promised outcome.