SIP Calculator Formula: Why Two SIP Calculators Give Different Answers
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The SIP calculator formula hides 2 choices: how a yearly return becomes a monthly rate, and when you pay. One ₹10,000 SIP gives 4 answers.
Two SIP calculators can give different answers for the same inputs. The SIP calculator formula is the same idea everywhere, but it hides 2 choices. One is how a yearly return becomes a monthly rate. The other is whether you pay at the start or the end of each month. For ₹10,000 a month over 10 years at 12% a year, these 2 choices alone move the answer from ₹22,19,300 to ₹23,23,391.
- A calculator needs a monthly rate. Dividing 12% by 12 gives 1% a month, which grows to about 12.68% in a year.
- A payment at the start of a month gets one more month of growth than a payment at the end.
- The same ₹12,00,000 paid in can show 4 different totals without any change in the return you typed.
- Before you compare, check which number each page shows: the total, the total after tax, or the total in today's money.
Try your own numbers
Type your own monthly amount, years and return into the SIP calculator, then switch the payment day and watch the total move.
Open the calculatorThe SIP calculator formula, step by step
A SIP, or systematic investment plan, puts a fixed amount into a fund on a set date each month. A SIP calculator grows each payment at a rate you choose. Then it adds up all the payments and their growth. That total is called the future value.
The formula works one month at a time. Each month the balance grows at a monthly rate, and a new payment is added. After 120 months, the balance is the answer for 10 years.
So every SIP calculator needs 2 things you may never see on the screen. It needs a monthly rate. It also needs to know when in the month each payment arrives.
Choice 1: how a yearly return becomes a monthly rate
You type a yearly return, such as 12%. There are 2 common ways to turn it into a monthly rate.
| Method | Monthly rate | Growth over 12 months |
|---|---|---|
| Divide the yearly rate by 12 | 1% | About 12.68% |
| Exact monthly rate | About 0.949% | Exactly 12% |
Dividing by 12 is simple, but the months build on each other. At 1% a month, ₹100 grows to about ₹112.68 in a year, not ₹112. So the yearly return you typed is quietly raised. The exact method picks the monthly rate that grows to exactly 12% in a year. LearnNifty's savings calculators use the exact method unless you switch it.
Choice 2: paying at the start or the end of the month
A payment at the start of a month earns that month's growth. A payment at the end of the month does not. Over 120 payments, that one month adds up.
Real SIP payments have their own dates. Each one buys units at that day's price. Neither setting matches every real plan exactly. The setting only changes how the calculator counts time.
How SIP is calculated with an example: 4 answers
Take ₹10,000 a month for 10 years at 12% a year. Every row below pays in the same ₹12,00,000. Tax and fund charges are left out.
| Monthly rate | When you pay | Value after 10 years |
|---|---|---|
| Exact monthly rate | End of month | ₹22,19,300 |
| Exact monthly rate | Start of month | ₹22,40,359 |
| Yearly rate divided by 12 | End of month | ₹23,00,387 |
| Yearly rate divided by 12 | Start of month | ₹23,23,391 |
The lowest and highest answers are ₹1,04,091 apart. Nothing about the investment changed. Only the counting changed. And the 12% is a number you type, not a return anyone can promise.
Is a SIP calculator accurate? Compare the same kind of number
The arithmetic can be exact and still not be a forecast. A SIP calculator is accurate about one thing. It shows what your payments become if the return you typed happens every single month. Real markets do not move that smoothly.
Also check which number a page shows in big type. One page shows the future value. Another shows it after a tax estimate. Another shows what it can buy in today's money. These are 3 different answers to 3 different questions.
Inflation means prices rise over time. At 6% inflation a year, ₹22,40,359 in 10 years buys about what ₹12,51,005 buys today. No money left the investment. The number only says what the money can buy.
Tax is one more layer. Each SIP payment is its own purchase of units, so each one has its own holding period. One tax figure on a 10-year projection is a rough estimate. Once real payments are made, the rate that fits their dates is called . A suits a single lump sum.
Compare two SIP calculators in 5 checks
- Type the same monthly amount, number of years and yearly return into both.
- Find how each one turns the yearly return into a monthly rate.
- Find whether each one counts payments at the start or the end of the month.
- Check whether the payment rises every year. A step-up changes the answer a .
- Compare the same kind of number: before tax, after tax, or in today's money.
Then try a lower return too. The gap between the 2 answers shows how much of the result rests on the number you typed.
Try both settings on the SIP calculator
LearnNifty's SIP calculator lets you switch the payment day and the rate method. Type your own amount, period and return. Then switch each setting and watch the total move. If your payment will rise every year, the step-up SIP calculator shows the whole schedule.
Open the calculatorSources
If a figure here disagrees with its source, trust the source.
Make it concrete
Frequently asked
Why do two SIP calculators show different results?
They may turn the yearly return into a monthly rate in different ways, or count payments on a different day of the month. Some also show the total after tax or in today's money. Match these settings before you compare.
Which SIP calculator formula is correct?
Both methods are correct arithmetic. They answer slightly different questions. If you mean 12% growth over a full year, the exact monthly rate matches it. Dividing by 12 grows a little faster.
Is the SIP calculator result guaranteed?
No. It shows what happens if the return you typed comes true every month. Real returns go up and down, and they can be lower than you assumed.
Does a SIP calculator include tax and charges?
Many leave them out, so read each page's own notes. The examples in this article leave out both tax and fund charges.
How much will ₹10,000 a month become in 10 years?
At an assumed 12% a year, with the exact monthly rate and payments at the start of each month, ₹12,00,000 paid in grows to about ₹22,40,359 before tax. A different return gives a different answer.
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