How SIP Returns Are Calculated
A SIP (Systematic Investment Plan) invests a fixed amount every month. Each installment compounds from its own date, so the maturity value uses the future value of an annuity-due:
M = P × [((1+i)ⁿ − 1) ÷ i] × (1+i) — where P = monthly amount, i = annual rate ÷ 12, n = months.
Example: ₹5,000/month for 10 years at 12% p.a. → you invest ₹6,00,000 and end with roughly ₹11,61,695 — nearly half the final corpus is market growth. That gap widens dramatically with time: the same SIP over 20 years ends near ₹49.9 lakh from ₹12 lakh invested. Time in the market matters more than the monthly amount.
Comparing with a one-time investment? Try our Compound Interest Calculator. Planning loan EMIs alongside? See the EMI Calculator.