Understanding SIP

A Systematic Investment Plan (SIP) is a method of investing a fixed amount of money in mutual funds at regular intervals (usually monthly). It promotes disciplined investing and helps in averaging out the cost of your investment over time, a concept known as rupee cost averaging.

Why Use This Calculator?

This tool projects the future value of your monthly SIP investments. It helps you understand how small, regular investments can grow into a significant corpus over the long term, making it essential for goal planning like buying a house, funding education, or retirement.

The Formula

The future value of a SIP is calculated using the future value of an annuity formula:

• M = the amount you will receive upon maturity.
• P = the amount you invest at regular intervals (your monthly SIP).
• n = the total number of payments you have made (e.g., years × 12).
• i = the periodic rate of interest (e.g., annual rate / 12 / 100).