SIP Calculator — Build Long-Term Wealth with Consistent Monthly Investments

SIP investing is simple in concept but powerful in execution

Invest a fixed amount every month in a mutual fund. Don't try to time the market. Don't stop when markets fall. Increase your contribution when your income grows. Continue for years. Let the combination of market growth and compounding work.

That's the entire SIP strategy. It sounds too simple to work — but the numbers say otherwise, and the SIP calculator makes them undeniable.

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Why Small Amounts Over Long Periods Outperform Large Amounts Over Short Periods

The counterintuitive truth: consistent small investments maintained for decades produce outcomes that feel disproportionately large.

Two investors:

• Investor A: ৳2,000/month for 30 years at 12% → approximately ৳70,29,000
• Investor B: ৳10,000/month for 10 years at 12% → approximately ৳23,23,000

Investor B put in 1.67× more money (৳12,00,000 vs. ৳7,20,000) but accumulated less than a third of Investor A's wealth. The extra 20 years of compounding in Investor A's case outweighs both the higher monthly amount and the additional total contribution.

Time in the market is the dominant variable.

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Rupee Cost Averaging: Why Falling Markets Help SIP Investors

SIP investors buy more units when prices fall and fewer when prices rise — automatically. This is called rupee cost averaging, and it's one of the key advantages of SIP over lump sum investing in volatile markets.

When markets drop 20%:

• A lump sum investor's portfolio is worth 20% less
• An SIP investor's portfolio is also worth 20% less on existing units — but their monthly purchase that month buys 25% more units than the previous month

The SIP investor accumulates more units during market downturns. When markets recover, those cheaper units generate proportionally more returns.

This is why experienced SIP investors often say: a market decline is good news if you're still in the accumulation phase. Your monthly investment buys the same fund at a lower price.

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How to Use the SIP Calculator on sadiqbd.com

1. Enter the monthly SIP amount — what you'll invest each month
2. Enter the expected annual return — 10–12% for equity funds over long horizons; 7–8% for balanced/debt funds
3. Enter the investment duration — in years
4. Read the results:
   • Total invested (your contributions)
   • Estimated maturity value (total with returns)
   • Wealth gained (the difference — what the market added)

The "wealth gained" number is often the most striking: after 15–20 years, the market's contribution typically exceeds the total you put in.

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Real-World SIP Scenarios

Building a ৳1 crore corpus

You want ৳1 crore. You're 30. How long and how much?

At 12% annual return:

• ৳5,000/month for 25 years: maturity ≈ ৳94,88,000 (close)
• ৳5,500/month for 25 years: maturity ≈ ৳1,04,37,000 ✓

Or: ৳5,000/month for 26 years: maturity ≈ ৳1,07,00,000 ✓

Multiple paths to the same destination — the SIP calculator maps them all.

Step-up SIP: increasing contributions annually

Many people start SIPs with a modest amount and increase it each year as their salary grows. A 10% annual step-up on a ৳3,000/month SIP dramatically changes outcomes.

Base SIP ৳3,000/month, flat for 20 years at 12%: ≈ ৳29,98,000 SIP ৳3,000/month with 10% annual step-up for 20 years at 12%: ≈ ৳56,31,000

The step-up nearly doubles the outcome despite the same starting amount. If salary increments typically run 8–12%, a SIP step-up that mirrors salary growth maintains the same percentage of income invested without requiring any extra sacrifice.

SIP for a child's education (15-year horizon)

Starting a ৳4,000/month SIP when a child is born, targeting education funding at age 18:

18 years × 12 months = 216 months At 11%: maturity ≈ ৳29,36,000

Total invested: ৳4,000 × 216 = ৳8,64,000 Market contribution: ৳20,72,000 — nearly 2.5× what was invested

A university education funded substantially by market returns on modest monthly contributions.

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When to Stop, Pause, and Continue

Never stop in a bear market. The impulse to pause SIP when markets fall is exactly backwards — falling markets are when SIP purchases are most valuable. Stopping during a decline locks in the lower unit count and misses the recovery.

Pausing for short periods is usually fine. If you genuinely cannot afford a month or two due to an emergency, most SIPs can be paused without penalty. Resume as soon as possible.

Review fund performance every 1–2 years, not every month. Short-term SIP performance is noisy. A fund that underperformed for 6 months may still be the right long-term choice. Evaluate against the benchmark and peer funds over 3-year and 5-year periods.

Increase the SIP amount at every salary increment. A portion of every raise should go into savings — the SIP is the easiest mechanism for this. Make it automatic so lifestyle inflation doesn't consume the entire increment.

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SIP vs. Lump Sum: Which is Better?

Both approaches have their place:

SIP wins when: markets are volatile, you're uncertain about timing, you're building a habit of regular investing, you don't have a large sum to invest at once.

Lump sum wins when: you have a large amount available and markets are in a confirmed downtrend (meaning future prices are likely higher than today's). In a rising market, the earlier all capital is invested, the more time it has to compound.

For most investors, most of the time, SIP is the practical and psychologically easier choice. Lump sum investing requires both capital availability and market timing confidence that most investors lack.

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Frequently Asked Questions

Can I run multiple SIPs at the same time? Yes — most investors run 3–5 SIPs in different fund categories (large-cap, mid-cap, international, flexi-cap) simultaneously. Each can be set up with auto-debit on specific dates.

Is 12% annual return realistic? Over long horizons (10–20+ years), diversified equity funds in South Asian markets have historically delivered 12–15% annual returns. Over shorter periods and in specific years, returns can be much lower or negative. Use 10% for conservative planning.

What happens to a SIP during a fund merger or closure? Your existing units are usually transferred to the surviving or successor fund. SEBI and equivalent regulators in South Asian countries require proper notice and options for investors. Your money is not lost.

Is the SIP calculator free? Yes — completely free, no sign-up required.

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The SIP calculator's most important function isn't calculating future value — it's showing you the size of what's possible with modest monthly commitments maintained patiently. The numbers are usually more encouraging than people expect.

Try the SIP Calculator free at sadiqbd.com — see what your monthly investment grows to, and find the monthly amount needed for any target corpus.