Investment · 8 min read
SIP Calculator Guide 2026 — How to Calculate Mutual Fund Returns
A Systematic Investment Plan (SIP) is the most popular way Indians invest in mutual funds. But do you know exactly how your SIP returns are calculated? This guide explains everything — the formula, what affects returns, and how to use HQCalc's free SIP calculator to plan your wealth.
What is a SIP?
A Systematic Investment Plan (SIP) allows you to invest a fixed amount in a mutual fund scheme at regular intervals — typically monthly. Instead of trying to time the market with a large lump sum, SIP lets you invest small amounts consistently and benefit from rupee-cost averaging and the power of compounding over time.
How SIP Returns are Calculated
SIP returns use the Future Value of a series of payments formula:
Where M is the maturity amount, P is the monthly investment, r is the monthly rate of return (annual rate ÷ 12), and n is the number of payments (months).
Example: ₹5,000/month for 20 Years at 12%
Monthly SIP: ₹5,000 | Duration: 20 years (240 months) | Expected return: 12% p.a.
Total invested: ₹12,00,000 | Estimated maturity value: ₹49,95,740 | Wealth gained: ₹37,95,740
This is the magic of compounding — you invest ₹12 lakh and get back nearly ₹50 lakh in 20 years.
Use HQCalc's Free SIP Calculator
Try our SIP Calculator to instantly calculate your returns for any amount, duration, and expected rate of return. The calculator also shows your year-by-year wealth growth and a visual chart.