What is a SIP?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount at regular intervals, usually monthly. Because the amount is fixed, you buy more units when prices are low and fewer when prices are high, which averages your purchase cost over time. A SIP is a way of investing, not a product. The returns depend on what is invested in.
How the calculator works
For a fixed monthly amount, with investments made at the start of each month:
FV = P × [ ((1 + i)n − 1) / i ] × (1 + i)
Here P is the monthly amount, i is the monthly rate (annual rate ÷ 12) and n is the number of months. With a step-up, the calculator raises P once a year and compounds each month in sequence. The inflation-adjusted value is the future value divided by (1 + inflation)years.
What changes the result
| Input | Effect |
|---|---|
| Monthly amount | Scales the total in proportion |
| Time period | Longer periods give compounding more time, and it matters more than most inputs |
| Assumed return | Small changes compound into large differences over decades, which is why you should test lower values |
| Step-up | Raising the amount with income increases the total invested |
| Inflation | Reduces what the final amount can buy |
Limits of any SIP calculator
- Market-linked returns are not steady. Real investments rise and fall year to year.
- The calculator uses one fixed return for every year.
- Taxes, expense ratios, brokerage and exit loads are not included.
- It cannot tell you what to invest in or whether SIPs are suitable for you.
For concepts behind planning, read our financial planning basics guide. For personalised planning, consult a SEBI registered Investment Adviser, which you can verify on sebi.gov.in.
Read our equity researchFrequently asked questions
What is a SIP calculator?
A SIP calculator estimates the future value of regular monthly investments based on an assumed annual return and time period. The result is an illustration, not a forecast.
How is SIP maturity value calculated?
With a fixed monthly amount, FV = P × [((1 + i)^n − 1) / i] × (1 + i), where P is the monthly amount, i is the monthly rate and n is the number of months.
What return should I enter?
That is your own assumption, and we do not suggest one. Because returns are not guaranteed, it helps to try several values, including low ones.
Are the results guaranteed?
No. Returns on market-linked investments are not guaranteed and can be negative.
What is a step-up SIP?
A step-up SIP raises the monthly amount by a set percentage each year, usually in line with income growth.
Does this include tax?
No. Taxes, fees and charges are not included, and they reduce actual returns.
Does Lotusdew Wealth give investment advice through this calculator?
No. Lotusdew Wealth is a SEBI registered Research Analyst (INH000021641). This tool is for illustration and does not recommend any product or give personalised advice.