What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is an investment method where you deposit a fixed sum of money at regular intervals into a mutual fund or index fund.
Tool Categories
SIP Calculator - Investment & Growth | 1ClickTools
Calculate returns on your Systematic Investment Plan (SIP) in mutual funds. Includes inflation adjustments, year-by-year schedules, and CSV downloads.
About This Tool
Disciplined investing through a Systematic Investment Plan (SIP) transforms volatile equity markets into your greatest ally. When stock prices drop, your fixed monthly contribution automatically purchases more fund units. When prices rise, those accumulated units grow in value, lowering your overall cost basis over time. Unlike lump-sum investments, which require timing the market, SIPs build financial discipline through automated monthly contributions. Over a 10, 15, or 20-year horizon, small monthly contributions (e.g. $200 or ₹5,000) can compound into significant wealth due to quarterly or annual dividend reinvestments. When evaluating long-term mutual fund SIPs, factoring in inflation is critical. Nominal gains can look impressive on paper, but a 2.5% to 4% inflation rate reduces real purchasing power over a 20-year period. This calculator lets you toggle inflation adjustment to see the true purchasing power of your projected wealth in today's dollars.
Frequently Asked Questions
What is rupee-cost averaging?
Rupee-cost averaging (or dollar-cost averaging) is the practice of investing a fixed amount at regular intervals regardless of market prices. You automatically buy more shares when prices are low and fewer when prices are high.
What return rate should I assume for equity SIPs?
Historically, broad market equity index funds (like the Nifty 50 or S&P 500) have generated 10% to 12% average annual nominal returns over 10 to 20-year periods.
Is SIP better than lump-sum investing?
SIP is generally safer for retail investors because it removes market timing risk and encourages automated discipline. Lump-sum investing yields higher returns only if made at market bottoms.
Can I change my SIP amount in the future?
Yes! Most mutual fund platforms allow you to step up or increase your monthly SIP contribution annually as your income increases.
How does inflation affect my SIP returns?
Inflation reduces future purchasing power. An 11% nominal return with 3% inflation equals a real growth rate of approximately 8%.
Are SIP returns subject to tax?
Yes. Equity fund gains held over 1 year are subject to long-term capital gains (LTCG) tax rates, which are typically lower than short-term tax rates.
What happens if I pause or miss a monthly SIP payment?
Most mutual fund providers do not penalize you for skipping an SIP payment. Your accumulated units continue to compound regardless.
Is this SIP calculator accurate for index funds?
Yes, calculations use precise compound series formulas executed directly in your web browser.
Is my personal financial data saved when using this tool?
No. 1ClickTools operates 100% in your browser. Zero financial data is sent to external servers.