Systematic Investment Plan (SIP) Return Calculator
A forward-projecting annuity due model calculating compound wealth accumulation via dollar-cost averaging.
What is a SIP? A Systematic Investment Plan (SIP) is a disciplined way of putting money into a mutual fund or index fund — a fixed sum, at a fixed interval, usually every month — instead of writing one big cheque and hoping you timed it right. Each instalment simply buys units at whatever price the fund is trading at that day, so across a few years your average purchase cost naturally settles somewhere between the market's highs and lows. Outside India, the same habit goes by a more familiar name: dollar-cost averaging.
Regulatory context. This calculator runs on the standard future-value-of-an-annuity-due formula for monthly SIPs — the same compounding logic that sits behind SEBI's investor-education material on SIPs in India, the U.S. SEC's official explainer on dollar-cost averaging, and the EU's UCITS framework that governs how pooled retail funds are allowed to operate. Every output here has been checked by hand against the formula.
This tool gives you a mathematical projection built on one constant, assumed rate of return. Real markets don't move in a straight line. Actual fund returns swing year to year, and nothing about the past performance of any fund guarantees what happens next.
How This Calculation Formula is Formulated
The maturity value of a SIP is just the sum of every monthly instalment (P), each one compounding at the periodic rate (i) for however many months it has left to grow, across a total run of n months. Because the deposit is assumed to land at the start of each month rather than the end, the formula carries one extra (1+i) factor — this is what separates an "annuity due" from an ordinary annuity.
Variable Definitions & Measurement Units
Worked example
An investor puts $500 into an equity fund every month, expects a 12% annual return, and stays in for 10 years (120 instalments):
The accelerating curve of compounding wealth
An EMI schedule is steep at first and flattens out. A SIP does the opposite — it starts almost flat and then takes off. In the early years, your own monthly contribution is doing most of the work, simply because compounding hasn't had time to build momentum. Somewhere around the two-thirds mark of a long SIP, that flips: gains from money you've already invested start growing faster than the fresh money you're adding each month. It's the reason every advisor says some version of the same thing — start early, even with a small amount, because time in the market matters more than the size of any single instalment.
SIP vs. Lump Sum
| Comparison Feature | SIP (Systematic) | Lump Sum |
|---|---|---|
| Entry-timing risk | Spread across many months | Concentrated on one date |
| Best suited to | Salaried investors, monthly cash flow | Windfalls, bonuses, inheritance |
| Market-timing skill needed | Low | High |
| Discipline required | High — needs consistency | One decision, done |
| Behaviour in volatile markets | Buys more units when prices fall | No averaging benefit |
| Bottom line | Tends to edge out lump sum in choppy or falling markets, on a cost-basis view | Can outperform if the market rises steadily from day one |
Typical long-term return ranges by asset class
| Asset Class | Indicative annual return (long-term) | Volatility |
|---|---|---|
| Large-cap equity funds | 10% – 12% | Moderate |
| Mid/small-cap equity funds | 12% – 16% | High |
| Index funds (broad market) | 10% – 13% | Moderate |
| Hybrid / balanced funds | 8% – 10% | Low–Moderate |
| Debt / bond funds | 6% – 8% | Low |
These are indicative historical averages only — not guarantees. Check a fund's official factsheet before you commit money to it.
Related reading
Investors juggling a loan often ask the same question: should spare cash go toward extra loan payments, or into a SIP? Our EMI calculator shows how prepayment shortens a loan's tenure, while this page shows what the same money could become if invested instead — comparing the two side by side is really the only honest way to weigh the opportunity cost. If you're picturing a one-time deposit rather than monthly instalments, our compound interest calculator covers that version of the same math.
Frequently Asked Questions About SIP Calculator
Does a SIP guarantee fixed returns?
No. Unlike a fixed deposit, a SIP sits in market-linked instruments, so returns move with the market. The rate you type into this calculator is an assumption for projection — not a promise.
What is dollar-cost / rupee-cost averaging?
Because you invest the same amount every month regardless of price, you automatically end up buying more units when prices dip and fewer when they climb — which smooths your average purchase cost over time.
Is a SIP better than investing a lump sum?
It depends on the market and your cash flow. SIPs cut timing risk and suit a regular paycheck; a lump sum can win out in a market that climbs steadily from your entry date.
What happens if I miss a monthly instalment?
Most SIPs just skip that month, no penalty — your existing units and their growth stay untouched, you only lose that one month's worth of compounding.
Are SIP returns taxed?
In most countries, yes — capital gains tax usually applies when you redeem units, and the rate depends on how long you held them and what asset class they're in. Check local rules or a tax advisor for the specifics that apply to you.
Verified sources (EN)
Related Online Calculators
Frequently referenced alongside SIP Calculator.
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Simulates monthly systematic cash withdrawals from mutual fund investments while tracking remaining capital appreciation and longevity.
Compound Interest Calculator
An exponential balance projection engine computing compound interest growth across multi-frequency reinvestment intervals.
Step-Up SIP Calculator
Calculates long-term mutual fund wealth with an annual percentage or fixed top-up to accelerate capital accumulation as income grows.