SIP
How SIP works
How monthly installments buy units, how compounding applies, and how a SIP calculator models growth.
Publisher: SmartCalculatorsLast updated: 17 August 2026
Installments and units
On each SIP date, the amount is used to buy units at that day’s net asset value. Over years you accumulate a pile of units bought at many different prices. That averaging is the operational heart of a SIP.
How the calculator treats this
SmartCalculators converts an expected annual return into a monthly rate and compounds the growing balance. Optional step-up increases the installment once a year. Taxes, expense ratios and missed months are not deducted unless you lower the assumed rate yourself.
Related calculators
- SIP CalculatorEstimate the future value of monthly systematic investments, with an optional annual step-up.
- Compound Interest CalculatorCalculate compound interest with yearly, quarterly, monthly or daily compounding.
- Retirement CalculatorEstimate a retirement corpus, required monthly investing and any shortfall or surplus.
Frequently asked questions
Why do calculators use a constant return?
A constant rate is a planning assumption. Live NAVs move every day. The calculator answers “if this rate held, what might the corpus look like?”, not “what will this fund do?”
Related guides
SmartCalculators provides educational calculators and estimates. Results are for informational purposes only and should not be considered financial, tax, investment, legal or professional advice.