SIP Calculator

ET Money’s SIP return calculator helps you see how your monthly SIP investments grow over time and visualise your SIP maturity amount before you invest. You can also know whether you’re on track to meet your financial goals. It gives clear projections based on annualised returns (CAGR) and makes long-term financial planning and wealth creation much simpler. Here are some of the key benefits:

• View Future Value: It shows the estimated future value of your SIPs, helping you plan your financial goal more accurately.
• Choose the Right SIP Amount: It helps you choose an optimal SIP amount and time horizon, allowing you to steadily build wealth and stay on track.
• Plan Your Investment Goals: It helps with investment goal planning by showing how changes in SIP amount or duration affect your final corpus.
• Check Long-Term Readiness: It makes financial planning easier by giving a quick view of whether you're saving enough for your long-term goals.

Overall, it’s a simple way to get clarity on your financial goal, figure out how much to invest, and build long-term wealth with confidence.

Several factors influence your SIP returns, and understanding these factors can help you plan your SIP more effectively. Here are some of the most common factors impacting your SIP return.

• Market Conditions: Market ups and downs directly affect your SIP returns. When markets rise, your investments grow faster. During downturns, you end up buying more units at lower prices, which helps with long-term averaging.
• Investment Tenure: The longer you stay invested, the more time compounding has to work. SIPs generally deliver better results over long periods because market volatility smoothens out, and your money grows steadily.
• Fund Selection: The type of fund you choose affects your final returns. Equity funds offer higher growth potential with higher risk, while debt funds provide stability with moderate returns. Hence, selecting the right fund based on your goals and risk tolerance is essential.
• Fund Manager's Expertise: Your SIP amount is managed by the professional fund managers, so your SIP return depends on their expertise. A skilled fund manager can make a noticeable difference in returns. Their ability to select the right stocks, manage risk, and identify opportunities can have a direct impact on your portfolio's performance.
• Expense Ratio: Every mutual fund charges an expense ratio, which is the annual fee for managing your investment. A lower expense ratio means more of your returns stay with you, especially over long-term SIPs. However, a higher expense ratio can reduce your overall return.

The working of a SIP calculator is based on this formula:

FV = P x ( { [1 + r] ^ n – 1} / r) × (1 + r)

Where,

In simple terms, this formula compounds every SIP instalment you invest each month and shows how much wealth your money can grow into over time.

Why do we use a monthly return (and not the annual one)

Since SIP contributions are made monthly, the calculator also requires the monthly rate of return. A common misconception is to divide the annual return by 12. This doesn’t work because mutual fund returns grow through compounding, not simple interest.

Monthly Return (r) = {(1 + Annual Return)^1/12} – 1

For example, a 12% annual return becomes roughly 0.95% per month, not 1%.
Compounding 0.95% for 12 months gives you exactly 12%.

If you assume a 1% monthly return, the compounded annual return exceeds 12%, which inflates all SIP calculations.

Example:

Suppose you start a monthly SIP of ₹1,000 for 5 years with an expected annual return of 12%. First, convert the annual return into a monthly return:

Monthly Return (r) = {(1 + Annual Return)^1/12} – 1

In that case, your monthly return rate would be:

r = {(1 + 0.12)^(1/12)} − 1 = 0.00949 or 0.949%

Now, apply this in the SIP formula:

FV = 1000 × {[(1 + 0.00949)^60 – 1] / 0.00949} × (1 + 0.00949), which becomes ₹81,104 in five years.

Note: As mutual fund returns are market linked, Your actual SIP returns may go up or down, depending on market conditions.

Using the ET Money SIP Calculator is straightforward, even for those new to investing. Here is a quick step-by-step guide to help you get started.

• Step 1: Select either "I know the investment amount" or "I know my goal amount" based on whether you know your monthly SIP or the target amount you want to reach.
• Step 2: Enter your monthly SIP amount or goal amount based on which option you selected.
• Step 3: Fill in the total investment duration. This is the time you plan to stay invested or the time you have to reach your goal.
• Step 4: Enter the expected rate of return.

Once you enter all these details, the SIP calculator will instantly show (if you enter investment amount):

• SIP maturity amount
• Total amount invested
• Estimated returns

If you provide the goal amount, the calculator will show:

• Goal amount
• Invest monthly
• Estimated returns

This helps you plan your SIPs more confidently and set realistic expectations.

Let’s understand how you can use this calculator with an example.

For example, imagine you want to invest Rs 10,000 per month for the next 10 years, and you want to estimate the returns. You would select “I know my investment amount”, enter Rs 10,000 as the monthly SIP, choose 10 years as the tenure, and enter 12% as the expected return. Once you fill in these details, the calculator shows that your future corpus will be around Rs 22.4 lakh.

Now consider a different situation where you want to save Rs 20 lakh in 10 years. In this case, select “I know my goal amount”, enter Rs 20 lakh as your target, choose 10 years as the duration, and keep the expected return at 12%. The calculator will then display the required monthly SIP amount, which is ₹8,608. This simply means that to build a ₹20 lakh corpus in 10 years, you need to invest ₹8,608 every month.

ET Money offers one of the simplest and most accurate online mutual fund SIP return calculators, providing the following benefits:

• Helps in getting immediate and precise results, sparing you from number-crunching.
• You don't need to be a finance expert; anyone can easily estimate their investment returns at any time.
• Plan your investments effectively with the SIP Calculator, ensuring you meet your financial goals effortlessly.
• Helps you estimate how much wealth your monthly SIPs can create over time.
• The mutual fund SIP calculator shows how time and compounding turn even small SIPs into a large corpus.
• Lets you try different SIP amounts, tenures, and return rates to see what works best for your goals.
• Makes it easy to plan your investments based on a monthly amount or a specific financial target.
• Gives you an instant estimate of the total value of your investment at the end of the tenure.
• Saves time by providing quick and accurate results. No manual calculations are needed.
• Allows you to compare different scenarios by changing the amount, duration, or expected returns.
• It is entirely free to use and available online at any time.
• Helps you understand how your SIP could perform under different market return assumptions.
• The SIP calculator supports thoughtful financial planning by showing how much you need to invest each month to reach goals like ₹10 lakh or ₹1 crore.
• Makes it easier to compare potential returns across different mutual fund categories and choose the one that fits your needs.
• The SIP calculator helps you compare SIP outcomes across different time horizons like 5, 10, 15, or 20 years so you can choose the investment duration that suits your goals best.
• Allows you to periodically review your SIP progress by comparing actual returns with estimated values, helping you decide whether to increase your SIP amount or adjust your tenure.
• Makes it simpler to filter out mutual funds that may not help you reach your target corpus by showing how different funds and expected return rates impact your SIP maturity amount.