How a SIP grows over time
A SIP (systematic investment plan) is a fixed amount invested on a regular schedule, and this SIP calculator projects what that recurring investment grows into. Enter your monthly SIP amount, an expected annual return, and a time frame. It shows your SIP maturity value split into what you invested versus the returns compounding added, with a year-by-year projection chart. Switch to reach-target mode and it calculates the SIP amount a goal requires.
How to use it
- Enter your SIP investment amount and how often you invest it.
- Set your expected annual return.
- Set the time period in years.
The result updates as you type. Add an existing lump sum or an annual step-up to model money already invested and contributions that rise over time.
How the SIP calculation works
Each contribution is invested at the start of its period and compounds for the rest of the term, so early contributions do the most work:
The calculator runs this month by month, so an annual step-up and any one-time lump sums land on the right date.
Planning a SIP: what it grows into
This is the default mode: you set the contribution and read the projected SIP returns. Use it when you know what you can invest monthly and want to see the future value of your SIP over time.
More than two-thirds of the maturity value here is returns, not contributions, which is the payoff of staying invested early. A one-time lump sum instead of a recurring amount is what the investment calculator models, while the compound interest calculator blends a starting balance with regular contributions.
Choosing an expected return
The return you enter changes the projection dramatically, so pick a number that matches your actual investment:
- Equity index funds (broad market): 8–12% historically, but with high year-to-year volatility. Use 10% for a rough long-term estimate, 8% for a conservative plan.
- Balanced/hybrid funds (equity + debt): 7–9% is a reasonable range.
- Debt funds or fixed deposits: 5–7% depending on the rate environment.
A common mistake is entering 15% because one fund delivered that recently. High returns rarely sustain over 15–20 years, and an optimistic assumption can leave you well short of your goal. When planning for a target, use a rate 1–2% below your best guess rather than above it. You can always beat a conservative plan; falling short of an aggressive one is harder to recover from.
Why starting early matters
Time is the single biggest lever in a SIP. The same monthly investment started 5 years earlier can produce a dramatically different outcome because early contributions compound for the entire horizon:
Waiting 5 years from 25 to 30 costs roughly $470,000 in this projection. That gap is almost entirely lost compounding, not lost contributions (the difference in amount invested is only $30,000). Starting early, even with a smaller amount, almost always beats starting later with a larger one.
The annual step-up
A step-up raises your SIP contribution by a set percentage each year to track income growth. Because the larger contributions still have years to compound, a modest step-up lifts the maturity value well beyond the extra you put in:
Even a 5% annual increase (roughly matching typical salary growth) adds over $150,000 to the outcome. Set the step-up to match whatever raise you realistically expect. If you are unsure, 5% is a sensible starting point.
Monthly vs quarterly SIP
Monthly investing spreads your purchases across more market points, which slightly smooths out volatility. Quarterly works if your income is irregular or lumpy (freelance, bonus-heavy). The return difference between the two is small over long periods, so choose the frequency that matches your cash flow. This calculator supports both, plus weekly and biweekly.
Reach-target mode: how much to invest
Switch to reach-target mode when you have a goal and need the required SIP amount. Enter the target, the return, and the time frame, and the calculator solves backward for the monthly contribution required, accounting for any existing lump sum and step-up.
Use this mode to plan against a specific number, whether that is a retirement corpus, a house down payment, or an education fund. To measure the annual growth rate a past investment actually delivered, use the CAGR calculator.
Common SIP mistakes to avoid
- Stopping during a downturn. Market drops are when your SIP buys more units at lower prices. Pausing locks in losses and misses the recovery.
- Chasing last year's top performer. Switching funds based on recent returns adds cost and rarely beats staying consistent.
- Ignoring inflation in your goal. A target that looks large today will buy less in 20 years. Inflate your goal by 5–6% per year, or use reach-target mode with a higher number.
- Not increasing the SIP. A flat contribution loses purchasing power every year. Use the step-up to at least match inflation.
Projections assume a constant return and are estimates, not a guarantee. Real markets vary year to year, and past performance does not predict future results.
Frequently asked questions
Can a SIP lose money?
Yes. A SIP in equity funds can show negative returns during market downturns, especially in the first few years. Over longer periods (10+ years), the odds of a loss shrink significantly because early cheap units eventually benefit from recovery. A SIP doesn't eliminate market risk — it spreads your entry points.
Should I increase my SIP every year?
Almost always. A flat SIP loses purchasing power to inflation each year. Increasing it by even 5% annually (matching typical income growth) can add 30–50% to your final corpus over 20 years. Use the step-up setting to model the impact.
SIP vs lump sum — which is better?
If you have a large amount today, lump sum historically beats SIP about two-thirds of the time because markets trend upward. But SIP is better for regular income you earn over time, and it reduces the risk of investing everything at a peak. Most people do both: lump sum what they have, SIP what they earn.
What happens if I miss a SIP instalment?
Most fund platforms simply skip that month with no penalty. Your maturity value will be slightly lower because one contribution misses its compounding window. Occasional misses barely matter over a 15–20 year horizon; consistent long gaps do.
What return rate should I assume for planning?
For equity funds, 10% is a common long-term estimate; for balanced funds, 8%; for debt, 6%. Use a conservative number when planning goals — you'd rather overshoot than fall short. Avoid using recent high returns (12–15%) as your baseline.
Does this account for taxes and inflation?
No — the projection is nominal and pre-tax. Real spending power will be lower after inflation, and taxes depend on your jurisdiction and account type. Treat the result as a gross estimate and plan your goal amount higher to account for both.