Compound Interest & SIP Calculator

Estimate SIP returns, total interest and maturity amount with yearly breakdown.

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What is a Compound Interest & SIP Calculator?

A Compound Interest & SIP Calculator helps you see how your money can grow over time, whether you invest a lump sum once or invest every month through a SIP (Systematic Investment Plan). Instead of guessing future values or doing complex maths in Excel, you simply enter your amounts, interest rate and time period, and the calculator shows you the total investment, total interest earned and final maturity amount with a clear yearly breakdown.

This combined tool is designed for users who want to compare simple interest, compound interest and SIP returns in one place and understand how compounding actually works.

How the Calculator Works

1. Simple Interest – Straight-line growth

Interest is calculated only on the original principal. It stays the same every year. Good for short-term loans or fixed deposits without compounding.

2. Compound Interest – Interest on interest

Interest is added back to the principal, so you earn interest on your interest. The more frequently it compounds (monthly vs annually), the faster your money grows. Ideal for long-term wealth creation.

3. SIP (Systematic Investment Plan) – Monthly investing

You invest small amounts regularly. Each monthly contribution compounds separately, benefiting from rupee-cost averaging over time.

Formulas Used

This calculator uses standard financial formulas to ensure accuracy:

Simple Interest:
SI = (P × R × T) / 100

Where P = Principal, R = Rate, T = Time.

Compound Interest:
A = P × (1 + r/n)(n × t)

Where A = Maturity Amount, P = Principal, r = rate (decimal), n = frequency, t = years.

SIP Future Value:
M = P × [ ((1 + i)n - 1) / i ] × (1 + i)

Where M = Maturity Amount, P = Monthly Investment, i = monthly rate, n = total months.

How to Use This Tool

  • Step 1: Select the tab (Simple, Compound, or SIP) based on your investment type.
  • Step 2: Enter your Principal/Monthly Amount, Rate of Interest, and Time Period.
  • Step 3: For Compound Interest, select the frequency (e.g., Annually or Monthly).
  • Step 4: Instantly view the Summary Cards, Chart, and Yearly Table to plan your finances.

Example: Compound vs. SIP

Compound Interest: Investing ₹1,00,000 lump sum at 8% for 10 years results in ~₹2.15 Lakhs.

SIP: Investing ₹5,000 monthly at 12% for 10 years results in ~₹11.6 Lakhs (Total Invested: ₹6 Lakhs).

This demonstrates the power of disciplined SIP investing vs one-time lump sum investments.

Frequently Asked Questions

Does this calculator guarantee returns? +
No. The calculator shows projections based strictly on the interest rate you enter. Actual returns depend on market conditions and the specific investment product.
Is SIP always better than lump-sum investing? +
Not necessarily. SIPs are great for disciplined investing and averaging out market volatility. Lump-sum investing can be better if markets are low and you have a large amount ready to deploy.
Which interest rate should I use? +
For Fixed Deposits, use the bank's current rate (e.g., 6-7%). For Mutual Funds (Equity), a common long-term estimate is 10-12%, though this is not guaranteed.

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