SIP Basics
SIP Calculator Explained: How to Plan Your Goals
By Vikas GuptaPublished Updated
Quick answer
A SIP calculator estimates the future value of your monthly investment using the formula FV = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i). You enter your SIP amount, expected return and time period, and it shows the amount invested and estimated value.
A SIP calculator does in a second what a spreadsheet would take minutes to do. The harder part is choosing realistic inputs.
What is the SIP formula?
FV = P × [((1 + i)ⁿ − 1) ÷ i] × (1 + i)
- P is your monthly SIP
- i is the monthly return (annual rate ÷ 12)
- n is the number of months
For ₹5,000 a month over 15 years at 12% a year, i is 0.01 and n is 180, which gives about ₹25.23 lakh on ₹9 lakh invested.
What return should I enter?
Returns are an assumption rather than a promise. Many long-term plans use 10% to 12% for equity funds, and 6% to 7% for debt funds. Test your plan with a lower rate too. If it only works at 15%, it is not a safe plan.
| ₹10,000 a month for 20 years | Estimated value |
|---|---|
| At 10% a year | ₹76.57 lakh |
| At 11% a year | ₹87.36 lakh |
| At 12% a year | ₹99.91 lakh |
What does a SIP calculator leave out?
- Uneven returns: markets do not deliver a steady 12%. Real outcomes depend on the path as well as the average.
- Inflation: ₹1 crore in 20 years buys far less than ₹1 crore today. Check with the Inflation Calculator.
- Tax: gains are taxed when you redeem. See how that works.
How do I use it to plan a goal?
- Estimate the goal’s future cost, including inflation.
- Enter that target in the SIP Need Calculator to find the monthly figure.
- If it is too high, extend the timeline or use a step-up SIP.
Frequently asked questions
Are SIP calculator results accurate?
The maths is exact for the return you enter, but no one knows future returns. Treat the result as a planning estimate and check it each year against your actual progress.
Why does the formula multiply by (1 + i) at the end?
It assumes each SIP is invested at the start of the month, so every instalment earns a return for that month as well.
Keep reading
Mutual fund investments are subject to market risks, read all scheme related documents carefully. Mutual fund distribution by Korlipara Vikas Gupta, AMFI-registered Mutual Fund Distributor, ARN-178652. Distributors earn commission from fund houses on regular plans. Content and calculators on this site are for education, not personalised investment advice. Illustrations use assumed returns, which are not guaranteed.