How SIP returns are calculated
A SIP (Systematic Investment Plan) invests a fixed amount every month into a mutual fund, and each installment compounds at the fund's return rate for the time remaining until maturity. Because later installments have less time to grow than earlier ones, the total maturity value is calculated with a future-value-of-annuity formula rather than simple compound interest on a lump sum.
The expected annual return you enter is not guaranteed — mutual fund returns fluctuate with the market, and past performance shown by any fund is not a promise of future results. This calculator projects a single constant-return scenario for planning purposes only.
M = P × [((1+i)^n − 1) / i] × (1+i), where i = annual rate ÷ 12 ÷ 100 (monthly rate), n = years × 12 (number of installments)
How is the maturity value of a SIP calculated?
A SIP's maturity value is found with the future-value-of-annuity formula M = P x [((1+i)^n - 1) / i] x (1+i), where P is your fixed monthly investment, i is the monthly return rate, and n is the total number of monthly installments. Example: investing 5,000 per month at an expected 12% annual return for 10 years grows to roughly 1,161,695 from 600,000 total invested — a gain of about 561,695.
Steps to calculate SIP maturity value
- Convert the expected annual return to a monthly rate by dividing by 12 and by 100 (for example 12% annual becomes 0.01 monthly).
- Convert the investment period in years to a total number of monthly installments by multiplying by 12.
- Apply the future-value-of-annuity formula to the monthly amount, monthly rate, and number of installments.
- Subtract total invested (monthly amount x number of installments) from the maturity value to see the estimated gain.
- Treat the result as one projection based on a constant assumed return, not a guarantee of the actual outcome.
SIP maturity formula
M = P x [((1+i)^n - 1) / i] x (1+i)
- M = maturity value (the projected total value of the SIP at the end of the investment period)
- P = fixed amount invested every month
- i = expected monthly return rate = (annual return % / 12) / 100
- n = total number of monthly installments = years x 12
Quick SIP answers
What is the maturity value of a SIP of 5,000 per month at 12% for 10 years?
The maturity value is about 1,161,695, from 600,000 invested in total — a gain of about 561,695.
How much is invested in total for a SIP of 5,000 per month over 10 years?
Total invested is 600,000 (5,000 × 120 months).
What is the maturity value of a SIP of 10,000 per month at 12% for 15 years?
The maturity value is about 5,045,760, from 1,800,000 invested — a gain of about 3,245,760.
How much is invested in total for a SIP of 10,000 per month over 15 years?
Total invested is 1,800,000 (10,000 × 180 months).
What is the maturity value of a SIP of 10,000 per month at 15% for 20 years?
The maturity value is about 15,159,550, from 2,400,000 invested in total.
What is the maturity value of a SIP of 1,000 per month at 10% for 5 years?
The maturity value is about 78,082, from 60,000 invested in total.
What is the maturity value of a SIP of 5,000 per month at 8% for 15 years?
The maturity value is about 1,741,726, from 900,000 invested in total.
How much is invested in total for a SIP of 10,000 per month over 20 years?
Total invested is 2,400,000 (10,000 × 240 months).
Example SIP projections
| Monthly amount | Annual return | Years | Maturity value | Total invested |
|---|
| 5,000 | 12% | 10 | 1,161,695 | 600,000 |
| 10,000 | 15% | 20 | 15,159,550 | 2,400,000 |
| 1,000 | 10% | 5 | 78,082 | 60,000 |
| 5,000 | 8% | 15 | 1,741,726 | 900,000 |
Frequently asked questions
Why use a future-value-of-annuity formula instead of simple compound interest?
A SIP is not a single lump sum — it is a series of separate monthly deposits, each starting to compound from a different date. The annuity formula correctly accounts for the fact that your first installment compounds for the full period while your last installment barely compounds at all, which a single lump-sum compound interest formula cannot capture.
Is the expected annual return I enter guaranteed?
No. Mutual fund and equity-linked returns are market-linked and fluctuate; the number you enter is only an assumption for projection purposes, commonly based on a fund's historical average, and actual results can be higher or lower, including negative in poor market periods.
Does this calculator account for expense ratios, exit loads, or taxes?
No. This is a gross return projection only; it does not subtract fund expense ratios, exit load charges for early withdrawal, or capital gains tax, all of which would reduce your actual net returns below the figure shown here.
What happens if I increase my SIP amount partway through, or skip a month?
This calculator assumes a constant monthly amount for the entire period with no missed installments; real-world step-up SIPs (where the monthly amount increases periodically) or missed payments would produce a different result than this simple projection.
This is a projection based on one assumed constant annual return; actual mutual fund returns vary with the market and are never guaranteed, and this calculator does not account for expense ratios, exit loads, taxes, or step-up contributions.