A monthly SIP calculator estimates the future value of repeated contributions using the amount paid, the number of payments and an assumed rate of return. Under the end of period convention used in SEBI's calculator code, the formula is FV = P × [((1 + i)n - 1) / i]. Here, P is the regular contribution, i is the assumed return per payment period and n is the number of payments. The output is an illustration, not a promised maturity amount.
The official SEBI Investor SIP Calculator asks for the SIP amount, monthly or quarterly frequency, expected annual return and duration in years. Its warning is direct: the figures illustrate possibilities, while stock market returns are neither fixed nor predictable. An expected return entered into a calculator should therefore be read as an assumption.
How do you calculate a monthly SIP?
For monthly contributions, divide the assumed annual percentage by 1,200 to obtain i, and multiply the number of years by 12 to obtain n. This uses an annual rate divided into equal monthly periods. A calculator that converts an effective annual rate into a monthly rate can produce a different answer, even before contribution timing is considered.
Take an invented example of Rs 5,000 contributed at the end of every month for five years, using an assumed annual rate of 8%. The inputs become P = 5,000, i = 8 / 1,200 and n = 60. Substitution gives FV = 5,000 × [((1 + 8/1,200)60 - 1) / (8/1,200)], or approximately Rs 3,67,384.28.
The contributions total Rs 5,000 × 60 = Rs 3,00,000. The difference between that sum and the modelled future value is Rs 67,384.28. These are independently calculated amounts using fictional inputs. They describe the arithmetic of a smooth assumed return, rather than a forecast for any fund or an estimate of what a particular investor will receive.
| Assumed annual rate | Total contributions | Illustrative end of month value |
|---|---|---|
| 0% | Rs 3,00,000 | Rs 3,00,000.00 |
| 6% | Rs 3,00,000 | Rs 3,48,850.15 |
| 8% | Rs 3,00,000 | Rs 3,67,384.28 |
| 10% | Rs 3,00,000 | Rs 3,87,185.36 |
Every row assumes the same Rs 5,000 monthly contribution and five year duration. None of the rates is a current market quote. The zero rate row simply adds contributions: when i is zero, use P × n instead of dividing by zero in the displayed formula.
Why do two SIP calculators show different answers?
One reason is whether each contribution is assumed to arrive at the beginning or end of a period. For a beginning of month contribution, multiply the end of month formula by (1 + i). Each payment then receives one additional period of assumed growth. In the 8% example, that produces Rs 3,69,833.51, approximately Rs 2,449.23 more than the end of month calculation.
SEBI's linked calculator code divides the annual rate by the number of periods and applies the end of period version, without the extra (1 + i) multiplier. This explains a difference that can otherwise look like a mistake. When comparing outputs, check the contribution amount, frequency, rate conversion, duration and payment timing before comparing the final numbers.
Does a SIP calculation include actual market movements?
This formula applies the same assumed return in every period. Actual investment values can move unevenly. The calculation shown here also makes no separate adjustment for tax, inflation, redemption charges or changes in the contribution amount. A step up contribution requires a different calculation because P changes over time. Merely increasing the final result by the step up percentage will not reproduce that payment schedule.
Use the output to understand what assumptions do to the arithmetic. A larger assumed rate raises the displayed value mechanically; that does not make the assumption more likely. SEBI's calculator directory provides other illustrations for separate financial questions. This guide does not select a fund, recommend an allocation or predict returns.
For related calculations, read our guides to quarterly compounding in an FD, the home loan EMI formula and credit card minimum payments. Each starts with a different payment structure, so its formula answers a different question.
