About This Calculator

I’ve developed this Inflation-Adjusted SIP Calculator to help investors determine the real future value of their investments. By factoring in inflation, you’ll see how much your money will truly be worth in the future, ensuring your financial goals stay on track.

SIP vs. Lump Sum: Key Differences

1. SIP (Systematic Investment Plan)
Benefits:

• ✅ Rupee-Cost Averaging: Reduces risk by spreading investments over time (buy more units when prices drop, fewer when they rise).
• ✅ Affordable: Start with small amounts (e.g., ₹500/month).
• ✅ Discipline: Enforces regular investing, ideal for salaried individuals.
• ✅ Lower Stress: No need to time the market.

Disadvantages:

• ❌ Slower Growth in Bull Markets: Gradual investments may miss rapid upward trends.
• ❌ Lower Initial Corpus: Takes time to build significant wealth.

2. Lump Sum Investment
Benefits:

• ✅ Immediate Exposure: Entire amount earns returns from Day 1.
• ✅ Higher Potential Gains: Ideal if invested during market lows.
• ✅ Simpler: One-time decision, no recurring commitments.

Disadvantages:

• ❌ Market Timing Risk: A poorly timed entry can lead to short-term losses.
• ❌ High Capital Requirement: Requires a large upfront amount.
• ❌ Volatility Stress: Entire investment is exposed to market swings.

Which Should You Choose?

• SIP: Best for steady income earners, long-term goals, and mitigating volatility.
• Lump Sum: Suitable for lump-sum funds (e.g., bonuses, inheritance) and bullish market phases.

Use this calculator to compare SIP and Lump Sum outcomes based on your risk appetite and financial goals!

What is Inflation?

Inflation is the gradual rise in prices of goods/services over time, reducing the purchasing power of money. For example:

• Today: A pen costs ₹10.
• After 1 year (5.5% inflation): The same pen costs ₹10.55.

India’s Current Average Inflation Rate: 5.5% (as of 2023).

How to Use This SIP Calculator with Inflation Adjustment

1. Monthly Investment: Enter your SIP amount (e.g., ₹10,000/month).
2. Annual Expected Return: Input the mutual fund’s projected annual return (e.g., 12%).
3. Duration: Select the investment period (e.g., 15 years).
4. Annual Inflation Rate: Use the current average (default: 5.5%) or adjust as needed.

Result: The calculator shows:

• Total Investment
• Estimated Returns
• Inflation-Adjusted Maturity Value
• Real Future Purchasing Power

Why This Calculator Matters

Most SIP calculators ignore inflation, giving an overly optimistic maturity value. This tool factors in inflation to show:

• Real Value: What your maturity amount can actually buy in the future.
• Investment Strategy: Whether you need to increase your SIP amount or adjust your portfolio.