Mutual Funds
SIP Calculator
See how your monthly investments grow through compound returns over time.
What is SIP and How Does it Work?
A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund at regular intervals — monthly, weekly, or quarterly. Your money buys more units when prices are low and fewer when high, averaging out the cost over time (rupee cost averaging).
The key growth driver is compounding: returns earned in earlier periods themselves earn returns in later periods. A ₹5,000/month SIP at 12% p.a. for 20 years turns ₹12L invested into over ₹49L — a wealth gain of 311%.
SIP Formula
The maturity value (FV) of a SIP is calculated using the compound interest formula for recurring payments:
Where P = monthly investment, r = monthly rate (annual rate ÷ 12 ÷ 100), n = total months.
SIP vs Lump Sum
Lump sum investing works better in rising markets; SIP works better in volatile or falling markets due to cost averaging. For most retail investors without the ability to time the market, SIP is the recommended approach — it enforces financial discipline and removes emotional decision-making.