SIP Calculator
SIP Calculator
Estimate what a monthly SIP could grow to at an assumed annual return, and how much of it is your money versus growth. Returns on market-linked funds are not guaranteed.
SIP
$10,000 a month for 10 years at 12% a year
Future value of a monthly SIP
- P
- the monthly instalment
- i
- the monthly rate: annual return ÷ 12 ÷ 100
- n
- the number of instalments. The final × (1 + i) is because each instalment is invested at the start of its month.
Worked example
$10,000 a month for 10 years at 12% a year
i = 12 ÷ 12 ÷ 100 = 0.01; n = 120
(1.01)120 = 3.3004
FV = 10,000 × (3.3004 − 1) ÷ 0.01 × 1.01 = $23,23,391
Invested $12,00,000; estimated gain $11,23,391
10,000 a month, by assumed return and years
| Return | 10 years | 15 years | 20 years |
|---|---|---|---|
| 8% | $18,41,657 | $34,83,451 | $59,29,472 |
| 10% | $20,65,520 | $41,79,243 | $76,56,969 |
| 12% | $23,23,391 | $50,45,760 | $99,91,479 |
| 14% | $26,20,914 | $61,28,538 | $1,31,63,463 |
The two conventions, and why the numbers differ
Most SIP calculators, including the one above, turn an annual return into a monthly rate by dividing by twelve. Strictly, 12% a year compounds from a monthly rate of about 0.949%, not 1%, so the usual convention slightly overstates growth. The difference is shown under the result: over ten years it is about 3.6% of the final value. Neither is wrong as long as you know which one a figure uses.
The bigger uncertainty is the return itself. Equity funds do not return a steady 12% a year; they rise and fall, and the order in which good and bad years arrive changes the outcome for a regular investor. A SIP calculator is a planning tool for a range of assumptions, not a forecast — the table shows how much the answer moves between 8% and 14%.
To see the actual return a real SIP has earned, with its irregular dates, you need XIRR rather than this formula. For a single lump sum use the compound interest calculator, and for a goal such as retirement the FIRE calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How is SIP maturity calculated?
FV = P × [(1 + i)n − 1] ÷ i × (1 + i), where i is the monthly rate and n the number of instalments. $10,000 a month for 10 years at 12% gives about $23,23,391.
Is SIP return guaranteed?
No. Mutual fund returns depend on the market. The calculator shows what an assumed return would produce; actual results can be higher or lower, including losses.
Why does another SIP calculator show a different answer?
Usually because it converts the annual return to a monthly rate differently (÷ 12 versus the compounding-exact rate) or assumes investments at the end rather than the start of each month.
What return should I assume?
Use more than one. Planning with a conservative figure and checking a lower one as well is safer than relying on past returns.
Related calculators
References
- Securities and Exchange Board of India (SEBI) / Association of Mutual Funds in India (AMFI). Mandatory risk statement for mutual fund communications: “Mutual fund investments are subject to market risks, read all scheme related documents carefully.”
- Brealey RA, Myers SC, Allen F. Principles of Corporate Finance. McGraw-Hill. The present value of an annuity, from which the level-payment loan formula follows.
- Central-bank inflation targets used as default inflation by currency: Reserve Bank of India (4% CPI, flexible inflation targeting framework); U.S. Federal Reserve (2% PCE); European Central Bank (2%); Bank of England (2% CPI); Bank of Canada (2%); Reserve Bank of Australia (2–3%); Bangko Sentral ng Pilipinas (3% ± 1). Actual inflation often runs above target.