SIP Calculator

Estimate what a monthly systematic investment plan could grow to over your chosen horizon.

How the SIP Calculator works

The SIP calculator finds what a fixed monthly investment grows to by treating each contribution as a separate deposit that compounds from the day it lands. A Systematic Investment Plan (SIP) puts the same dollar amount into a mutual fund or index fund every month, so the engine uses the annuity-due future-value formula, where every contribution is made at the start of the month and earns return for that month too. That fixed-monthly structure is what sets a SIP apart from a one-time lump sum or a flexible deposit schedule.

The core formula is:

FV = PMT × [((1 + i)ⁿ - 1) / i] × (1 + i)

• FV = maturity value (what you end up with).
• PMT = your fixed monthly contribution.
• i = expected annual return divided by 12 (the monthly rate).
• n = total number of monthly contributions (years × 12).
• The trailing (1 + i) is the annuity-due adjustment, since money goes in at the start of each month.

Internally, the tool runs these steps:

1. Convert the annual return you enter into a monthly rate: i = rate / 12.
2. Convert the time horizon into months: n = years × 12.
3. Compute the growth factor (1 + i)ⁿ.
4. Apply the annuity-due formula to get FV.
5. Compute amount invested = PMT × n.
6. Compute estimated gains = FV - amount invested, so you see contributions versus market growth separately.

Edge cases it handles: a 0% return falls back to FV = PMT × n (no compounding, just deposits). A step-up SIP raises PMT by a set percentage each year, so it sums year-by-year blocks instead of one clean formula. It also keeps the result an estimate, because real SIP returns are market-linked and vary month to month, not fixed like a CD - the single rate you enter is only a long-run average, never a promise.

Example calculation

Here are three worked SIPs, each with a different contribution, return, and horizon, so you can see how the formula behaves. Every figure below was recomputed with the annuity-due formula above.

Example 1 - $500/month, 12% expected, 20 years. Monthly rate i = 0.12 / 12 = 0.01, and n = 20 × 12 = 240. The growth factor (1.01)²⁴⁰ = 10.892554. FV = 500 × [(10.892554 - 1) / 0.01] × 1.01 = $499,573.96. You actually put in $500 × 240 = $120,000.00, so estimated gains are $499,573.96 - $120,000.00 = $379,573.96 - about 76% of the final pot is growth, not your own cash.

Example 2 - $1,000/month, 10% expected, 15 years. i = 0.10 / 12 = 0.008333, n = 180. FV = $417,924.27 on $180,000.00 invested, for gains of $237,924.27 (about 57% growth). Bigger contributions but a shorter runway means compounding has less time to dominate.

Example 3 - $250/month, 8% expected, 30 years. i = 0.006667, n = 360. FV = $375,073.79 on just $90,000.00 invested, for gains of $285,073.79 (about 76% growth). The smallest monthly amount here still beats Example 2 on total gains because time, not size, did the heavy lifting.

Scenario	Monthly	Return	Years	Invested	Maturity (FV)	Gains
1	$500	12%	20	$120,000.00	$499,573.96	$379,573.96
2	$1,000	10%	15	$180,000.00	$417,924.27	$237,924.27
3	$250	8%	30	$90,000.00	$375,073.79	$285,073.79

The lesson from the table: Example 3 invested the least cash of all three yet finished with more gains than Example 2. A long horizon is the single most powerful lever in a SIP, because every monthly contribution gets more months to compound - which is exactly the dynamic a one-time future-value calculation cannot capture.

Tips for using the SIP Calculator

• Enter a return you can defend, not a hope. Long-run US large-cap stock returns have historically run roughly 7% to 10% before inflation; modeling 15% to 20% will flatter the result and wreck your real plan.
• Run the same SIP at two returns - say 6% and 10% - and treat the gap as your uncertainty band. A SIP is market-linked, so a single number is never the real answer.
• Use the step-up SIP feature: raising your monthly amount by even 5% to 10% a year (in step with raises) can more than double the final pot versus a flat contribution over 20 years.
• Watch the split between amount invested and gains, not just the headline maturity value. Early on, most of the balance is your own cash; the crossover where growth exceeds contributions is when compounding takes over.
• Subtract the fund's expense ratio from your expected return before you enter it. A 0.05% index fund versus a 1.0% active fund is almost a full point of return you keep every year.
• Set contributions to auto-debit on payday. The whole point of a SIP is removing the monthly decision - automation is what delivers the dollar-cost-averaging benefit.
• Don't stop a SIP in a down market. Falling prices mean your fixed dollars buy more shares, which is exactly where cost averaging pays off later.
• Increase the contribution, not the assumed return, when the projection looks short. Return is outside your control; the monthly amount is the one lever you actually own.
• Model inflation separately - a $500,000 maturity value in 30 years buys far less than today; check the buying power with an inflation calculator before you call the goal 'enough'.
• Keep the horizon honest. Money you may need within 3 to 5 years does not belong in a stock SIP; the formula assumes you leave it untouched the whole term.

SIP vs lump-sum investing: which builds more?

A lump sum usually ends with more money if markets rise steadily, but a SIP wins on discipline, lower timing risk, and the fact that most people don't have a large sum sitting idle. The difference is structural: a lump sum compounds the entire amount from day one, while a SIP feeds money in gradually, so early dollars compound for years and recent dollars have barely started.

Feature	SIP (monthly)	Lump sum
Cash needed up front	Small, recurring	Large, all at once
Timing risk	Spread across many prices	All in at one price
Best when	You earn and save monthly	You already have a windfall
Cost averaging	Yes, automatic	No
Typical end value (rising market)	Lower	Higher

The gap is concrete: $12,000 invested as a lump sum at 10% for 10 years grows to about $32,485, while the same $12,000 dripped in as $100/month over those 10 years reaches only about $20,655 - because the lump sum had the whole amount compounding from month one. The SIP's edge is not a bigger number; it is that you can start with $100 instead of needing $12,000 today. If you have a one-time amount to model instead of monthly deposits, use the future value calculator for a single sum, or the investment calculator when you want to mix a starting lump sum with ongoing contributions. This SIP tool is purpose-built for the pure fixed-monthly case.

Dollar-cost averaging: the real engine behind a SIP

Dollar-cost averaging means your fixed dollar amount automatically buys more fund shares when prices are low and fewer when prices are high, which lowers your average cost per share over time. Because the dollar figure is fixed and the price moves, the share count flexes for you - this is the mechanic that separates a true SIP from simply parking a lump sum.

Say you invest $300 every month. At $30 a share you buy 10 shares; the next month at $20 you buy 15; at $25 you buy 12. You paid $900 for 37 shares - an average of about $24.32 each - even though the simple average of the three prices was $25.00. You came out ahead of the price average precisely because the dip let your fixed dollars buy more.

This is why pausing a SIP during a downturn is usually a mistake: the cheap months are the ones doing the most work. Cost averaging does not guarantee a profit and cannot protect against a market that keeps falling, but it removes the impossible job of timing entries - which is the failure point for most DIY investors. A lump-sum buyer gets one price for the whole position; a SIP investor gets a blended price across every market mood.

Step-up SIP: how an annual increase changes the math

A step-up SIP raises your monthly contribution by a set percentage every year, and because each increase compounds for the remaining term, the final pot grows far more than the extra cash you add. The tool models this by running the SIP one year at a time and bumping the contribution before each new year.

Compare two 20-year SIPs at a 10% expected return. A flat $500/month invests $120,000.00 and grows to about $382,848.45. Now start at the same $500 but step up 10% each year: you invest $343,650.00 over the term and finish around $807,270.16. You contributed roughly $223,650 more in cash, yet the maturity value jumped by about $424,422 - the increases compounded for years rather than sitting idle.

The practical rule: tie your step-up to your annual raise. If your pay rises and your SIP doesn't, lifestyle creep quietly eats the money instead. See how to size raises with the pay raise calculator, then route part of each raise straight into the SIP.

Common mistakes when using a SIP calculator

The biggest errors are treating the projection as a guarantee and feeding the tool an unrealistic return. Avoid these:

• Assuming the return is fixed. SIP returns are market-linked and vary every month. The formula uses one steady rate only as an average; real paths zig-zag and can be negative in a bad year.
• Plugging in a heroic return. Entering 18% to 20% turns a modest plan into a fantasy. Use a defensible long-run figure and stress-test a lower one.
• Forgetting fees. A 1% expense ratio is a 1% cut to your effective return every single year - subtract it before entering the rate.
• Ignoring inflation. A big future number is not big future buying power. Convert it with the inflation calculator.
• Mixing up lump sum and monthly. This tool assumes a fixed monthly deposit; a one-time amount belongs in a future-value tool, not here.
• Stopping in a crash. Halting contributions when prices fall throws away the cheapest shares you'll ever buy - the opposite of what cost averaging rewards.

How to calculate a SIP by hand or in Excel

In a spreadsheet, the entire SIP sits in one formula: =FV(rate, nper, -pmt, 0, 1). The arguments map directly to the inputs, and the trailing 1 is what makes it an annuity due (contributions at the start of each month).

• rate = annual return / 12 (e.g. 0.12/12 for 12%).
• nper = years × 12.
• pmt = your monthly amount, entered negative because it's money leaving your pocket.
• pv = 0 (no starting balance in a pure SIP).
• type = 1 for start-of-month; use 0 for end-of-month.

For Example 1 above, =FV(0.12/12, 240, -500, 0, 1) returns $499,573.96 - an exact match to the formula. By hand, compute (1.01)²⁴⁰ = 10.892554, subtract 1, divide by 0.01, multiply by 500, then multiply by 1.01. To get gains, subtract =500*240 from the result. Drop the final 1 argument and you'll get the slightly smaller end-of-month figure ($494,627.68 here), which is why it matters that SIP tools use the start-of-month convention.

Is your SIP projection any good? Benchmarks to sanity-check

A realistic stock SIP is built on a long-run return in the high single digits, and a healthy plan saves a meaningful slice of income for a long time - the horizon matters more than the headline rate. Use these reference points to gut-check your inputs:

Lever	Conservative	Reasonable	Aggressive (suspect)
Expected annual return	5% to 6%	7% to 10%	15%+
Horizon	5 to 10 years	15 to 25 years	under 3 years
Fund expense ratio	under 0.10%	0.10% to 0.50%	over 1.0%

A common savings benchmark is investing around 15% of gross income for retirement; size your monthly SIP against that with the savings goal calculator. And remember the compounding reality from the examples: with 20-plus years, growth typically becomes the majority of the final balance, so if your projection shows gains far smaller than contributions, your horizon is probably too short.

Advanced uses: goals, retirement, and reverse-engineering the amount

Beyond a simple projection, a SIP model answers two harder questions: what will my plan be worth, and what monthly amount do I need to hit a target?

To reverse-engineer the contribution, fix the maturity value, return, and years, then solve for PMT - or just nudge the monthly input until the FV matches your goal. For example, hitting $100,000 in 10 years at a 10% average return takes about $484.14 a month, of which roughly $58,097 is your own contributions and about $41,903 is market growth. That turns a vague wish ('I want $1,000,000') into a concrete monthly habit. For retirement specifically, pair this with the retirement calculator to translate the maturity value into a sustainable withdrawal stream, since a large balance still needs a safe drawdown rate.

SIPs also stack: many investors run one SIP for retirement, a second for a house down payment, and a third for a child's education, each with its own horizon and return assumption. Model them separately, because a 5-year house fund should use a far more conservative return than a 30-year retirement fund. The shorter the goal, the less stock risk it should carry.

US tax and account notes for SIP-style investing

The term SIP comes from India's mutual-fund market, but the mechanics - a fixed automatic monthly investment - are identical to a US automatic investment plan, and where you hold it changes your tax outcome. The formula doesn't care about the wrapper, but your after-tax result does.

• Taxable brokerage account. Your fixed monthly buys create many tax lots; long-term gains (held over a year) are taxed at lower rates than short-term gains, and reinvested dividends are taxable in the year received.
• Roth IRA. Contributions are after-tax, but qualified growth and withdrawals are tax-free - powerful for a long SIP. Check eligibility and limits with the Roth IRA calculator.
• 401(k). A payroll-deducted contribution is the original automatic monthly investment, often with an employer match that this SIP formula doesn't capture - model that with the 401(k) calculator.

This is general information, not tax advice; rules and limits change, so confirm current figures before you act.

SIP growth quick reference: monthly amount x average return x time

A SIP invests a fixed amount every month, so its ending value depends on three things: how much you put in, the average market return, and how many years you stay invested. The table below recomputes each balance with the start-of-month (annuity-due) formula FV = P x [((1+i)ⁿ - 1) / i] x (1+i), where i is the annual rate divided by 12 and n is total months. Remember these returns are market-linked estimates, not fixed promises, and the gains column shows how much the market added on top of your own contributions.

Monthly SIP	Avg. return	Years	You invest	Projected value	Gains
$100	12%	10	$12,000	$23,234	$11,234
$100	12%	30	$36,000	$352,991	$316,991
$200	8%	10	$24,000	$36,833	$12,833
$250	10%	15	$45,000	$104,481	$59,481
$300	9%	20	$72,000	$201,869	$129,869
$500	12%	20	$120,000	$499,574	$379,574
$1,000	10%	25	$300,000	$1,337,890	$1,037,890

Read across one row to see how big the gains slice becomes over time - at $100/month for 30 years, market growth is nearly 90% of the balance. Model your own amount, rate, and a step-up increase in the SIP calculator.

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For a related deep dive, see SEC Investor.gov compounding tool.

SIP Calculator — frequently asked questions

Are SIP returns fixed?

No — they depend on market performance of the underlying fund and are not guaranteed.

Does rupee/dollar cost averaging help?

Investing a fixed amount regularly buys more units when prices are low, smoothing the average cost.

Are SIP returns guaranteed?

No — they depend on market performance of the chosen fund.

What is cost averaging?

Buying more units when prices are low and fewer when high, smoothing the average cost.

How much does a $500/month SIP grow to in 20 years at a 12% return?

A $500 monthly SIP earning 12% a year grows to about $499,574 in 20 years, using the start-of-month (annuity-due) formula most SIP tools use. You contribute $500 x 240 months = $120,000, and the remaining roughly $379,574 is market-linked gains. Returns are not fixed, so a weaker 8% average would instead land near $296,474. Model your own numbers with the <a href="/sip-calculator/">SIP calculator</a>.

How much does a $100/month SIP earn in 30 years?

A $100 monthly SIP at a 12% average return reaches roughly $352,991 after 30 years, of which only $36,000 is your own money and about $316,991 is growth, so gains make up nearly 90% of the balance. This shows why time matters more than amount in a SIP. Because returns are market-linked, a 7% average would instead produce about $122,709. Compare scenarios with the <a href="/sip-calculator/">SIP calculator</a>.

What is a step-up SIP and how much more does it earn?

A step-up SIP raises your monthly contribution by a fixed percentage each year so your investing keeps pace with raises. Take $200/month at 12% for 15 years: a flat SIP grows to about $100,915, but adding a 10% annual step-up lifts it to roughly $173,677 - about 72% more - because you invest $76,254 instead of $36,000. Model annual increases in the <a href="/sip-calculator/">SIP calculator</a>.

How is a SIP different from a lump-sum investment?

A SIP invests a fixed amount every month, while a lump sum invests everything once. Putting $12,000 in today at 10% for 10 years grows to about $32,485, but spreading the same $12,000 as $100/month over 10 years reaches only about $20,655 - because the lump sum compounds for the full period. A SIP wins when you lack cash upfront and want automatic cost averaging; for a single deposit use the <a href="/future-value-calculator/">future value calculator</a>.

How do I calculate SIP returns in Excel?

Use Excel's FV function with type set to 1 for start-of-month deposits: =FV(rate/12, months, -payment, 0, 1). For $500/month at 12% over 10 years, enter =FV(0.12/12, 120, -500, 0, 1), which returns about $116,170 on $60,000 invested. Enter the payment as a negative number so the result is positive. To verify quickly, use the <a href="/sip-calculator/">SIP calculator</a>, which applies the same annuity-due math.

How do I calculate a SIP by hand?

Use the annuity-due future value formula: FV = P x [((1+i)ⁿ - 1) / i] x (1+i), where P is the monthly amount, i is the annual rate divided by 12, and n is total months. For $250/month at 12% over 20 years, i = 0.01 and n = 240, giving about $249,787 on $60,000 invested. The final (1+i) factor reflects investing at the start of each month. Check it on the <a href="/sip-calculator/">SIP calculator</a>.

Is a $250/month SIP worth it over 15 years?

Yes - a $250 monthly SIP at a 10% average return grows to about $104,481 in 15 years, turning $45,000 of contributions into roughly $59,481 of gains, so more than half the balance is growth. That return is market-linked, not guaranteed, so a poor 6% stretch would instead yield about $73,068. Small, consistent amounts compound meaningfully over time. Test different rates with the <a href="/sip-calculator/">SIP calculator</a>.

What is the difference between the amount invested and the SIP gains?

Amount invested is simply your monthly payment times the number of months, while gains are everything the market adds on top. For a $300/month SIP at 9% over 20 years, you invest $72,000 (300 x 240) and the total reaches about $201,869, so gains are roughly $129,869. The longer the horizon, the larger the gains slice grows relative to your contributions. See the split in the <a href="/sip-calculator/">SIP calculator</a>.

How does dollar-cost averaging work in a SIP?

Dollar-cost averaging means your fixed monthly amount buys more fund units when prices are low and fewer when prices are high, lowering your average cost. If you invest $300 at unit prices of $10, $12, $8, $15, and $9, you buy about 145.83 units for $1,500, giving an average cost of $10.29 versus a simple average price of $10.80. This is automatic in any SIP. Project the balance with the <a href="/sip-calculator/">SIP calculator</a>.

Are SIP returns fixed or guaranteed?

No - SIP returns are market-linked and not guaranteed, because the money buys mutual fund or index fund units whose value rises and falls. A SIP calculator assumes a constant average rate only to estimate; real returns vary year to year and can be negative in downturns. For example, $1,000/month at 10% for 25 years projects about $1,337,890, but a 7% reality would give roughly $814,797. Unlike a fixed-rate <a href="/cd-calculator/">CD</a>, outcomes are uncertain.

How long does it take to reach $1 million with a $500/month SIP?

A $500 monthly SIP at a 12% average return takes about 25.5 years - roughly 306 months - to cross $1,000,000. Because growth compounds, most of that $1 million arrives in the final years rather than evenly. A lower 9% average would push the timeline well past 30 years, and a higher monthly amount shortens it sharply. Returns are market-linked, not fixed. Run your own target on the <a href="/millionaire-calculator/">millionaire calculator</a>.

How much should I invest monthly to reach $100,000 in 10 years?

You need about $484.14 per month for 10 years at a 10% average return to reach $100,000, using the start-of-month SIP formula. That is roughly $58,097 of contributions plus about $41,903 of market gains. At a lower 7% average you would need closer to $574 per month, since weaker growth shifts more of the burden onto your contributions. Solve for your own goal with the <a href="/savings-goal-calculator/">savings goal calculator</a>.

Does a 1% higher fund fee really hurt my SIP that much?

Yes - a 1% higher annual fee can cost tens of thousands over a long SIP. For $500/month over 20 years, a 12% net return grows to about $499,574, but a 1% fee that drops the net to 11% leaves only about $436,787 - a difference of roughly $62,787, all from fees compounding against you. Lower-cost index funds are why fee differences matter so much. Compare net rates in the <a href="/sip-calculator/">SIP calculator</a>.

Is it better to invest $100/month for 20 years or $200/month for 10 years?

Investing $100/month for 20 years usually beats $200/month for 10 years, even though both put in $24,000 total. At a 12% average return, the 20-year SIP grows to about $99,915 while the 10-year SIP reaches only about $46,468 - more than double - because the early dollars compound far longer. Starting sooner with less generally beats starting later with more. Compare both timelines in the <a href="/sip-calculator/">SIP calculator</a>.

Guides & articles

• How a SIP Calculator Works: The Formula, a Worked Example, and What the Numbers Really Mean
• Step-Up SIP: How Raising Your Investment Each Year Changes the Math

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