What Is a SIP?
A SIP (Systematic Investment Plan) means investing a fixed amount at regular intervals — usually monthly — into mutual funds or similar vehicles. It's the default way many Indian investors build long-term wealth.
Instead of timing the market with one large lump sum, you average your purchase price over time.
Rupee Cost Averaging
When markets dip, your fixed SIP buys more units; when markets rise, you buy fewer units. Over volatile periods, your average cost per unit can be lower than the average price — not guaranteed, but a common benefit of discipline.
Cost averaging does not remove market risk — it smooths entry psychology and can help avoid buying only at peaks.
Future Value of Regular Investments
Each installment compounds for a different length — the first deposit grows longest. The combined future value is a series (annuity) formula combined with compound growth:
FV ≈ Σ (each payment × growth factor for remaining periods)
Our calculator handles this for you with your expected return, SIP amount, duration, and optional annual step-up (increasing SIP each year).
Step-Up SIP
A step-up SIP increases your monthly investment each year — often by 10% or matching your expected salary growth. Even modest increases dramatically boost the final corpus because more money compounds in later years.
| Strategy | Who it suits |
|---|---|
| Flat SIP | Stable income, simplicity |
| Step-up | Young earners expecting raises |
What Return Should I Assume?
Equity long-term historical returns are often quoted in nominal terms — inflation eats real purchasing power. For planning:
- •Use conservative real returns (e.g. 4–6% after inflation for rough equity planning)
- •Past performance is not a promise
Re-run the calculator as you get closer to your goal.
How to Use This SIP Calculator
Enter monthly SIP, expected annual return, years, and optional step-up %. Review total invested, estimated corpus, and wealth gain. Adjust return assumptions to see best / base / worst cases mentally.