Mutual Fund SIP Calculator — Monthly Investment Growth

A systematic investment plan, or SIP, is a way of investing a fixed amount of money into a mutual fund or index fund at regular intervals — almost always monthly — instead of investing everything in a single transaction. Rather than deciding whether today is a good day to buy, a SIP automates the decision: the same dollar amount goes in every month, whether the fund is up, down, or flat that day.

SIPs became popular because they turn investing into a habit rather than a series of one-off decisions, which removes a lot of the emotional friction that causes people to delay investing or to buy and sell at the wrong times. Because contributions are automated straight from a paycheck or bank account, a SIP also forces a kind of forced savings discipline: the money is invested before it has a chance to be spent elsewhere.

This calculator models two common SIP structures. The standard mode assumes a fixed monthly contribution for the entire investment period. The step-up mode reflects a more realistic pattern for many investors — as income rises over a career, the monthly SIP contribution is increased by a set percentage each year, which meaningfully accelerates the final balance because the larger later-year contributions still get years of compounding. You can browse historical fund and index performance on our mutual funds market data pages to get a sense of realistic long-run return assumptions before plugging numbers into this calculator.

This calculator has two modes. Pick the one that matches how you actually plan to invest.

Standard SIP

Use this mode when you plan to invest the same fixed amount every month for the entire period. Enter your monthly investment amount, the annual return you expect the fund to generate, and the number of years you plan to keep investing. The calculator returns the projected future value, the total amount you will have contributed out of pocket, and the portion of the final balance that came purely from investment growth.

Step-Up SIP

Use this mode if you plan to increase your monthly contribution over time — for example, in line with annual raises. Enter your starting monthly investment, the annual step-up percentage (how much the contribution rises each year), your expected annual return, and the number of years. Because the step-up compounds contribution size year over year in addition to compounding the invested balance, this mode requires the number of years to be a whole number, since the step-up only takes effect at each 12-month mark.

In both modes, the "expected annual return" should reflect the fund's total return (price appreciation plus reinvested dividends or distributions), and the calculator applies it monthly, which is the standard convention for retail SIP projections.

The standard SIP formula treats your monthly contributions as an annuity due— a series of equal payments made at the start of each period rather than the end. This matters because most SIPs debit and invest your money at the beginning of the month, so that month's contribution earns a full month of growth before the next one arrives. The formula is:

FV = P × [((1 + r)^n − 1) / r] × (1 + r)

where P is the fixed monthly investment, r is the monthly rate of return (your annual return divided by 100, then divided by 12), and n is the total number of months (years × 12). The bracketed term is the standard future-value-of-an-annuity factor; the extra multiplication by (1 + r) at the end converts it from an ordinary annuity (payments at period end) to an annuity due (payments at period start), which is the more accurate model for how SIPs actually debit funds.

Total Invested is simply P × n — the sum of every contribution with no growth applied. Total Growth is FV − Total Invested, isolating exactly how much of the final balance came from compounding rather than from your own deposits.

The step-up mode has no clean closed-form formula because the contribution amount itself changes every 12 months, so the calculator simulates it month by month: each month, the running balance is multiplied by (1 + r) and that month's contribution is added, and at the start of every new year the contribution is increased by the step-up percentage. This is the same annuity-due logic applied piecewise, one year's fixed contribution at a time.

Example 1: A $500 Monthly SIP Over 10 Years

Suppose you invest $500 every month into an index fund expected to return 12% annually, for 10 years. The monthly rate is 12% / 12 = 1%, and there are 120 months. Plugging into the formula: FV = 500 × [((1.01)^120 − 1) / 0.01] × 1.01. Since (1.01)^120 ≈ 3.300, this works out to roughly $116,170. You would have contributed $500 × 120 = $60,000 out of pocket, meaning about $56,170 of the final balance came purely from compounding — nearly as much as you put in.

Example 2: A Larger, Longer SIP

Now consider $1,000 per month at an 8% expected annual return for 20 years (240 months, monthly rate ≈0.667%). The formula gives a future value of roughly $592,950, against total contributions of $240,000 — meaning growth accounts for roughly $352,950, or about 60% of the final balance. This illustrates how much more compounding does the heavy lifting the longer the time horizon stretches.

Example 3: Step-Up SIP vs. Flat SIP

Take the same $500/month starting point and 12% expected return over 10 years, but this time increase the contribution 10% every year (so it rises from $500/month in year one to roughly $1,181/month by year ten). The step-up simulation produces a future value of about $167,050, against roughly $95,625total invested — versus the flat SIP's $116,170 future value on just $60,000 invested. The step-up investor put in about $35,625 more of their own money over the decade, but ended up with roughly $50,880 more in their account, because those larger later-year contributions still benefited from meaningful compounding time.

Small Rate Assumptions Compound Into Big Differences

Because SIP projections run over many years, a seemingly small difference in the assumed annual return — say 8% versus 10% — can produce a strikingly different final balance. Always test your numbers at more than one rate rather than trusting a single optimistic projection.

This Model Assumes a Perfectly Smooth Return

Real markets don't compound at a constant monthly rate — they go up and down. Two SIPs with the same average return can end with different final balances depending on the exact sequence of good and bad months, an effect known as sequence-of-returns risk. This calculator, like most SIP projection tools, smooths that away for simplicity; treat its output as a directional estimate, not a guarantee.

Account for Fees and Taxes Separately

The return you enter should ideally already reflect fund expense ratios, since those quietly reduce your realized return every single year. This calculator does not model taxes on distributions or capital gains, which vary heavily by account type and jurisdiction — for a rough after-tax estimate, you can lower the return input by an estimated tax drag.

Pair This With a Growth-Rate Reality Check

If you're comparing a SIP's projected outcome to a specific fund's historical track record, our CAGR calculator can compute that fund's actual annualized return from its own price history, giving you a more grounded rate to plug back into this SIP calculator.

All content on this page is educational and does not constitute financial advice. Projected SIP returns are hypothetical and not a guarantee of future performance. For personalized guidance, consult a certified financial planner.