What is a SIP?
A Systematic Investment Plan — investing a fixed amount every month rather than a lump sum. Each instalment buys into the fund and then compounds, so a steady habit of small contributions can build a large amount over time.
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SIP Calculator
Future value of a monthly Systematic Investment Plan, split into amount invested and returns.
M = P·[((1+i)^n − 1)/i]·(1+i)
Frequently asked questions
What do the parts of the SIP formula mean?
P is your monthly investment, i is the monthly return rate (the annual rate divided by 12 and by 100), and n is the number of months. The bracketed term compounds the whole stream of payments; the final (1 + i) reflects that each instalment is invested at the start of its month.
Why do my returns end up larger than what I put in?
Early instalments stay invested for years and earn returns on returns. Given enough time, that compounding growth can exceed the total of all the contributions you made — the longer the horizon, the more lopsided it becomes in favour of growth.
How do I read the stacked columns?
Each column is one year. The lower part is the cash you have actually invested by then; the upper part is the growth compounding has added on top. Watch the upper band take up more and more of each column as the years pass.
Where is this used in real life?
Regular fund investing — $500 a month at 10% for 20 years grows to roughly $380,000, of which only $120,000 is your own money. Retirement saving — automating a monthly transfer into super or an index fund. Goal saving — building a house deposit steadily rather than waiting to invest a lump sum. Returns are an estimate, not a guarantee.