Our SIP (Systematic Investment Plan) Calculator is a powerful tool designed to help you project the future value of your regular investments in mutual funds, now with an advanced Step-Up feature. By understanding how it works, you can make more informed financial decisions and plan strategically for your long-term goals.

How SIP Calculators Work: The Formula

The core calculation behind a standard SIP calculator follows this formula:

$M = P \times \left( \frac{\left[1 + i\right]^n – 1}{i} \right) \times \left( 1 + i \right)$

Where:

• M: The amount you receive upon maturity (the future value of your investment).
• P: The amount you invest at regular intervals (your monthly SIP installment).
• n: The total number of payments you have made (e.g., investment period in years multiplied by 12 for monthly SIPs).
• i: The periodic rate of interest (the annual expected return rate divided by the number of periods per year, e.g., annual rate / 12 for monthly SIPs).

For example, if you invest ₹1,000 per month for 12 months at an annual rate of 12%, the periodic monthly rate (i) is 12% / 12 = 1% or 0.01. Using the formula:

$M = 1000 \times \left( \frac{\left[1 + 0.01\right]^{12} – 1}{0.01} \right) \times \left( 1 + 0.01 \right)$

This would give approximately ₹12,809 after one year. Remember that the actual rate of return can fluctuate based on market conditions, affecting the estimated returns.

Using Our SIP Calculator: Step-by-Step Guide

1. Monthly Investment Amount: Enter your planned regular SIP contribution.
2. Expected Annual Return Rate (% p.a.): Input the anticipated yearly return rate.
3. Investment Period (Years/Months): Specify the total duration of your investment. You can choose between years or months.

Understanding Your SIP Calculator Results

• Total Amount Invested: The cumulative sum of all your monthly SIP contributions.
• Estimated Returns: The potential profit your investments are projected to earn.
• Total Future Value: The projected total worth of your investments at the end of the tenure.

The Step-Up SIP Feature

A Step-Up SIP, also known as a Top-Up SIP, allows you to increase your investment amount at predefined intervals, usually annually. This feature is particularly useful as your income increases over time.

How it Works: When you enable the Step-Up feature, you can specify either a fixed amount or a percentage by which your monthly SIP contribution will increase each year. For example, you might choose to increase your SIP by 10% annually or by a fixed ₹1,000 each year.

Impact on Returns: Incorporating a step-up significantly boosts your potential future value. By investing more as your capacity grows, you leverage the power of compounding on larger amounts over time, leading to a much higher corpus at maturity compared to a flat SIP.

Advantages of Step-Up SIP:

• Matches Rising Income: Naturally aligns your investments with your increasing earning potential.
• Faster Wealth Creation: Accelerates the accumulation of your investment corpus.
• Discipline with Flexibility: Provides the discipline of regular investing while offering flexibility to increase contributions.
• Reach Goals Faster: Helps you achieve your long-term financial goals, such as retirement or down payments, more quickly.

Our calculator allows you to easily see the difference the Step-Up feature can make to your final investment value. Experiment with different step-up amounts or percentages to see the potential impact on your wealth creation journey.