SIP Calculator

A systematic investment plan is a fixed contribution made on a fixed schedule. The term is standard in India, and the same idea is called dollar cost averaging, a regular savings plan, or simply a monthly contribution elsewhere. This page treats it the way the arithmetic does: as a series of deposits into an account that compounds, with each deposit growing only for the time remaining after it is made.

That last clause is the whole reason a SIP behaves differently from a single investment. Money you contribute in the final year has months to grow, not decades. On the page defaults, 250 a month at 10% for ten years, you contribute 30,000 and finish with 51,638.01, a gain of 21,638.01. The first contribution multiplies by about 2.7 over the full ten years. The last one barely moves.

How the schedule is built

The calculator simulates month by month rather than applying a closed form annuity formula, which is what lets it handle a step up, a switch between monthly and yearly contributions, and a choice of whether money goes in at the start or the end of each period. The balance is grown by a monthly factor derived from your nominal rate and compounding frequency, so the yearly and monthly views agree with each other and with the headline figure.

The timing switch is small but real. Contributing at the beginning of each period rather than the end gives every deposit one extra period of growth, and the effect is exactly one period of interest: on the defaults the two answers are 51,638.01 and 51,211.24, a difference of 426.76, and the ratio between them is 1.0083333, which is precisely 1 plus 10% divided by 12. If your contribution leaves your account on the first of the month, beginning is the honest setting.

Why yearly contributions can beat monthly ones here

Switching the deposit frequency to yearly and entering 3,000 instead of 250 a month is not the same as contributing 250 twelve times. On the defaults it produces 54,027.38 rather than 51,638.01, ahead by 2,389.38, because the whole 3,000 lands at the start of the year and earns for the full twelve months. That is not the calculator flattering yearly investing. It is what actually happens if you genuinely have 3,000 available in January. If you do not, and the yearly figure is the one you are quoting to yourself, you are modelling money you did not have.

Reading the output without overstating it

The return figure in the summary is a total, not an annual rate. On the defaults it reads 72.13%, which is the whole gain measured against the whole amount contributed across ten years. It is not 72% a year, and it does not annualise to the 10% you typed either. Spread the same total across ten years and you get about 5.58% a year, which is lower than the input rate for the same reason the gain is smaller than a lump sum would produce: most of the money was not invested for most of the time.

The effective annual rate shown alongside it is a different quantity again. At 10% nominal compounded monthly it reads 10.4713%, which is what the rate you entered actually earns across a year once each month's growth starts earning too. Compare accounts on that figure, and judge your own plan on the corpus.

This calculator applies one constant rate for the whole term. Markets do not do that, and for a SIP specifically the difference is not a rounding detail. It is larger than every other input on the page.

Take ten annual returns: 25, 20, 15, 12, 10, 8, 5, 2, 0 and 3 percent. Their arithmetic mean is exactly 10%, and their compounded average is 9.7350%. Now run 250 a month through them in that order, strong years first, and the corpus finishes at 41,119.23. Reverse the order so the same returns arrive strong at the end, and it finishes at 59,901.85. Same numbers, same average by either definition, 18,782.62 apart. That is 45.7%.

For a single lump sum the same experiment produces nothing at all. Thirty thousand invested once through either sequence finishes at 75,957.65 both ways, to the cent, because multiplication commutes and the order of the factors cannot change the product. Order only matters when the amount at risk changes over time, which is precisely what a SIP does. So sequence risk is not a general market caveat that applies equally to everything. It is specific to what this page models.

The return you assume is worth more than the discipline you keep

Run 250 a month for thirty years and change only the rate. At 6% you finish with 252,384.40. At 8%, 375,073.79. At 10%, 569,831.33. At 12%, 882,478.44. The span between a cautious 8% and an optimistic 12% is 507,404.65, which is more than five times everything you contributed. A projection is not a forecast, and the honest way to use this page is to run the pessimistic case first and treat the optimistic one as an upside rather than a plan.

Fees come straight off that rate

There is no fee field, and the reason is that a fee is not a separate quantity: it is a reduction in the rate. Enter your expected return net of costs. It is worth doing carefully, because on a long SIP the numbers are brutal. Contributing 250 a month for thirty years at 10% gives 569,831.33. At 9%, which is the same fund carrying a 1% expense ratio, it gives 461,118.51. That single percentage point costs 108,712.82, which is 19.1% of the corpus and more than the 90,000 you contributed in total.

What is not included

No tax, no transaction costs, no exit load, no missed contributions, and no rate that varies by year. Dividends are assumed reinvested at the same rate. If you need withdrawals rather than contributions, the SWP calculator models drawing an income down and reports when it runs out. For a single amount invested once, use the compound interest calculator, which also handles deposits and withdrawals together.

Time does far more work than the contribution

This is the comparison worth internalising. Contribute 250 a month for forty years and you put in 120,000 and finish with 1,594,195.06. Contribute 500 a month for twenty years and you put in exactly the same 120,000 and finish with 382,848.45. Identical money, four times the outcome, and the only difference is how long it was invested. Doubling the contribution does not come close to doubling the term.

The same effect measured as a delay: at 250 a month and 10%, thirty years produces 569,831.33 and twenty five years produces 334,472.59. Waiting five years costs 235,358.74, or 41.3% of the final corpus, in exchange for contributing 15,000 less. The lost growth is roughly fifteen times the money saved.

Where the gain overtakes your own money

At 250 a month and 10%, growth exceeds contributions in month 151, which is twelve years and seven months. Before that point you are mostly funding the balance yourself. After it the account is doing more of the work than you are, and the gap widens quickly: at fifteen years the gain is 132% of what you contributed, at twenty years 219%, at thirty years 533%. Most of the interesting part of a SIP happens after the point where most people would have stopped.

• 5 years: 19,520.60 from 15,000 contributed
• 10 years: 51,638.01 from 30,000
• 15 years: 104,481.07 from 45,000
• 20 years: 191,424.23 from 60,000
• 25 years: 334,472.59 from 75,000
• 30 years: 569,831.33 from 90,000
• 40 years: 1,594,195.06 from 120,000

Step up, and why it pays more than it costs

The annual increase raises your contribution by a fixed percentage every twelve months, which is how most people's saving actually behaves as income rises. Over twenty years at 10%, a flat 250 a month gives 191,424.23 from 60,000 contributed. Adding a 5% annual step up gives 270,642.50 from 99,197.86 contributed, and a 10% step up gives 403,635.08 from 171,825.00.

The 5% case is the instructive one. It adds 79,218.27 to the corpus in exchange for 39,197.86 of extra contributions, so every additional unit invested came back as 2.02. That multiple is lower than the one on your first contribution, and it has to be, because step up money arrives later and compounds for less time. A step up is a good idea, but it is a weaker lever than simply starting earlier.

What it takes to reach a million

At a 10% assumed return, the monthly contribution needed to reach 1,000,000 is 1,306 over twenty years, 747 over twenty five, 439 over thirty, 261 over thirty five, and 157 over forty. The forty year figure is about an eighth of the twenty year one, which is the same point as above in its most compressed form.

Lump sum beats a SIP on paper, which is not the argument for it

If you already hold the money, investing it at once wins. Thirty thousand invested for ten years at 10% reaches 81,211.24, against 51,638.01 for the same 30,000 fed in at 250 a month, so the lump sum is 29,573.24 or 57.27% ahead. Every model with a constant positive return will say this, because a SIP leaves most of the money uninvested for most of the term.

The case for a SIP is not that it beats a lump sum. It is that most people do not have a lump sum, that contributing automatically removes the decision of when to invest, and that under a falling then rising market a SIP genuinely does better, which is the sequence effect described above. Compare the two honestly on the compound interest calculator, which can model a starting balance and monthly deposits at the same time.

Inflation, and the comparison most calculators get wrong

Enter an inflation rate and the results restate the corpus in today's money. Over twenty years at 10% with 6% inflation, 191,424.23 becomes 59,686.98. Placed next to the 60,000 you contributed, that looks like twenty years of investing produced nothing, and it is the comparison a lot of people will reach for. It is wrong.

The 60,000 was not paid in today's money. It went in 250 at a time across two decades, and the early contributions were made in far more valuable currency. Deflating each one to the date it was made gives 35,518.13 in today's terms, not 60,000. Against that, a real corpus of 59,686.98 is a real gain of 24,168.85, or 68% in purchasing power. Still much less than the 219% the nominal figures suggest, but not the flat line the naive comparison implies.

The real return itself is computed as (1 + return) divided by (1 + inflation) minus 1, not by subtracting one from the other. At 10% against 6% the exact answer is 3.7736%, where the subtraction claims 4%. Over a twenty or thirty year horizon that difference is worth a large amount of the final figure, and the shortcut always errs in the flattering direction.

Two inputs that are easy to get wrong

The rate field has a period toggle. Leaving it on monthly while typing an annual figure multiplies your rate by twelve, so 10 becomes 120% a year and the ten year corpus jumps from 51,638.01 to over 254 million. The result is absurd enough to catch, but a smaller mistake, such as entering a monthly 1% as an annual rate, produces a wrong answer that looks entirely plausible.

The other is the compounding frequency, which describes how often the account compounds and not how often you contribute. Contribution frequency is set separately. Setting compounding to 1 while contributing monthly is a valid model, and a conservative one, but it is not what a monthly compounding fund does.

Related calculators

For drawing an income out of a corpus rather than building one, use the SWP calculator. For a single amount with optional cashflows, the compound interest calculator. For growth measured per trade rather than per month, the forex compound calculator. For an account that credits interest every day, the daily compound calculator, and for interest that never compounds, the simple interest calculator.