SIP Calculator

SIP stands for Systematic Investment Plan. It is a method of investing a fixed amount regularly (typically monthly) into mutual funds or other investment vehicles. Each month, your contribution buys units at the current price. Over time, this averages out the purchase cost through a process called rupee cost averaging, reducing the impact of market volatility on your total investment.

A step-up SIP automatically increases your monthly contribution by a fixed percentage each year, typically matching your salary increment. If you start with 5,000 per month and step up 10% annually, your second year contribution becomes 5,500. This significantly accelerates wealth creation because higher contributions compound for the remaining investment period.

The goal-based mode reverses the calculation. Instead of asking how much you will earn, it tells you how much you need to invest monthly to reach a specific target amount. Enter your goal amount, expected return rate, and time horizon, and the calculator tells you the exact monthly SIP required using the future value of annuity formula.

Neither is universally better. Lump sum investing works well when markets are undervalued or trending upward, as the entire amount benefits from growth immediately. SIP works better in volatile markets because it averages your purchase cost over time. The comparison mode in this calculator shows you exact numbers for both approaches so you can make an informed decision.

Historical long-term equity mutual fund returns in India have averaged 12-15% annually, though past performance does not guarantee future results. Debt funds typically return 6-8%, and balanced funds 9-11%. For conservative planning, use a rate 1-2% lower than historical averages. The calculator lets you model different scenarios easily.