SIP: 500/Month, 8%, 5 Years
Investing 500 per month at 8% annual return for 5 years grows to 36,983. Total invested: 30,000. Free SIP calculator.
Total invested = 30,000. Estimated gains = 6,983. Maturity value = 36,983 using monthly compounding at 8% p.a.
How This Was Calculated
SIP maturity value uses the future value of annuity formula:
FV = M x [((1 + i)^n - 1) / i] x (1 + i)
Where M is the monthly investment, i is the monthly return rate (annual rate / 12 / 100), and n is the total number of months. The (1 + i) multiplier accounts for investments made at the start of each month.
Frequently Asked Questions
What is a SIP?
A Systematic Investment Plan (SIP) lets you invest a fixed amount every month into a mutual fund, building wealth gradually through rupee cost averaging and compounding.
What return rate should I expect?
Equity mutual funds in India have historically returned 10-12% annually over long periods. Debt funds return 6-8%. Use 12% for optimistic equity projections and 8% for conservative estimates.
Is SIP better than a lump sum investment?
SIP reduces timing risk through rupee cost averaging — you buy more units when markets fall. For salaried investors, SIP also enforces discipline. Lump sum can outperform in consistently rising markets.
Are SIP returns guaranteed?
No. Mutual fund returns depend on market performance. This calculator shows projections based on the rate you enter, not guaranteed outcomes.
What is the power of compounding in SIP?
In the early years most of your balance is your own contributions. After 15+ years, gains compound on previous gains, and growth accelerates dramatically — which is why starting early matters more than investing more.