SIP Calculator

A SIP is simply a method of investing in mutual funds through regular contributions, unlike investing a lump sum amount at one go.

The SIP return calculator helps you understand how your monthly SIP investments may grow over time and shows the estimated maturity amount before you invest. It also helps you check whether you’re on track to meet your financial goals using projections based on annualised returns (CAGR). Here are some of the benefits:

• Works in reverse to show the monthly SIP needed to build a target corpus, such as ₹20 lakh in 10 years.
• Shows the estimated future value of your SIP investments
• Helps you decide the right SIP amount and investment duration
• Shows how changes in SIP amount or tenure affect your final corpus

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 simple, even if you are new to investing. Follow these steps to get started.

Step 1: Choose one of the two options based on what you already know:

• I know the investment amount (if you know your monthly SIP), or
• I know my goal amount (if you know the target amount you want to achieve).

Step 2: Enter your monthly SIP amount or goal amount, depending on the option selected.

Step 3: Enter the investment duration. This is the period you plan to stay invested or the time available to reach your goal.

Step 4: Enter the expected rate of return.

Once you fill in these details, the calculator instantly shows the results.

If you enter the investment amount, you will see:

• 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.

Example

Example 1: When you know the investment amount

Imagine you want to invest ₹10,000 per month for the next 10 years, with an expected return of 12%.

• Select I know my investment amount
• Enter ₹10,000 as the monthly SIP
• Choose 10 years as the tenure
• Enter 12% as the expected return

The calculator shows that your future corpus will be around ₹22.4 lakh.

Example 2: When you know the goal amount

Now, assume you want to build a corpus of ₹50 lakh in 10 years.

• Select I know my goal amount
• Enter ₹50 lakh as the target amount
• Choose 10 years as the duration
• Enter 12% as the expected return

The calculator shows that you need to invest ₹21,520 per month to reach your goal.

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

• It gives instant and accurate estimates of SIP returns without manual calculations.
• It shows the total amount invested and the estimated maturity value of your SIP.
• It helps you understand how time and compounding can grow your SIP into a large corpus.
• It lets you test different SIP amounts, tenures, and expected return rates.
• It supports goal-based planning by showing how much you need to invest monthly to reach a target corpus.
• It helps you compare SIP outcomes across different time horizons or return assumptions.
• It makes it easier to review your SIP progress and adjust the amount or duration if needed.