SIP Calculator

Calculate potential returns on your Systematic Investment Plan

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Your SIP Investment Projection

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Total Value

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Yearly Growth Projection

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Systematic Investment Plan (SIP): The Smart Way to Invest

A Systematic Investment Plan (SIP) is a disciplined strategy for investing in mutual funds or ETFs where you contribute a fixed amount at regular intervals (monthly/quarterly) rather than making a single lump sum investment. SIPs leverage dollar-cost averaging and compounding to build wealth over time, regardless of market conditions. This method is particularly effective for investors worldwide as it eliminates market timing challenges and makes investing accessible through affordable, regular contributions.

SIP Returns Formula

FV = P X [((1 + r)n - 1) / r] × (1 + r)

Where:

  • FV = Future Value of investment
  • P = Monthly investment amount
  • r = Monthly rate of return (annual rate/12)
  • n = Total number of months

Power of SIP

Investing $10,000 monthly at 12% for 30 years grows to $35 million, with you investing only $3.6 million. That's the magic of compounding!

Why SIP is Better Than Lump Sum Investing

Feature SIP Lump Sum
Market Timing No need to time the market Requires good market timing
Risk Lower risk through averaging Higher risk if market peaks
Discipline Enforces financial discipline Requires self-discipline
Affordability Start with small amounts Requires large capital
Emotions Removes emotional investing Emotions can affect decisions

Dollar Cost Averaging

SIP automatically buys more units when prices are low and fewer when prices are high, averaging your purchase cost over time.

SIP Investment Strategies

For Beginners

  • Start with index funds or large-cap funds
  • Begin with $500-1000 per month
  • Increase SIP amount with salary hikes
  • Stay invested for at least 5-7 years

For Experienced

  • Diversify across market caps
  • Use top-up SIP to increase amounts
  • Combine with STP for lump sums
  • Rebalance portfolio annually

Rule of Increasing SIP

Increase your SIP amount by 10% every year. $10,000/month at 12% for 30 years grows to $35 million. Increasing by 10% yearly makes it $75 million!

Benefits of SIP Investing

  • Disciplined Investing - Automatic contributions build financial discipline
  • Dollar-Cost Averaging - Reduces impact of market volatility
  • Compounding Growth - Small regular amounts grow significantly over decades
  • Accessibility - Start with small amounts (often $50-$100 minimums)
  • Flexibility - Adjust contribution amounts or frequency as needed
  • Emotional Neutrality - Removes guesswork from investment timing

Types of SIPs Available Worldwide

  • Regular SIP - Fixed amount at fixed intervals
  • Flexible SIP - Vary contribution amounts within limits
  • Step-up SIP - Automatic periodic increases
  • Perpetual SIP - Continues indefinitely until stopped
  • Trigger SIP - Automated adjustments based on market indicators

Summary for Quick Reference

Systematic Investment Plans (SIPs) offer investors worldwide a disciplined approach to building wealth through regular, automated contributions to mutual funds or ETFs. The SIP formula FV = P × [((1 + r)n - 1) ÷ r] × (1 + r) demonstrates how consistent investments grow through dollar-cost averaging and compounding returns. Accessible with small minimum investments (often $50+), SIPs provide reduced market timing risk, emotional neutrality, and long-term growth potential regardless of your location. Use our global SIP calculator to project your investment growth potential.

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