Project the future value of a recurring investment from an initial deposit, a regular contribution, expected annual return and time horizon.
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Assumes a constant annual return and monthly compounding. Past performance does not guarantee future results.
Dollar-cost averaging (SIP) turns investing into a habit instead of a decision. By putting the same fixed amount into the same assets every month — regardless of the price — you remove the emotional pressure of timing the market. You automatically buy more units when prices dip and fewer when prices spike, and over time the combined effect of averaging and compounding quietly builds your portfolio.
Dollar-cost averaging means investing a fixed amount at regular intervals — say monthly — instead of investing a lump sum at one point. You buy more shares when prices are low and fewer when they are high, which averages out your entry price over time and removes the need to time the market.
Each monthly purchase adds shares to your portfolio at the current price. The cost per share of your whole position is the total invested divided by total shares. Because you keep buying the same dollar amount, low-price months pull your average cost down, and high-price months pull it up less — a natural contrarian effect.
Every early contribution has more time to grow. With monthly compounding, the interest on each month's balance becomes part of the next month's base. Over 10–30 years this effect dominates: a large share of the final value can come from growth on earlier contributions rather than from the contributions themselves.
Mathematically, a lump sum invested today wins in more than 60–70% of historical market periods, because it is fully exposed to growth sooner. DCA's advantage is psychological: it reduces the risk of buying at a local top and the anxiety that comes with it, which helps investors stay the course through downturns.
The timing option models an annuity due (contributions at the beginning of each month, each earning a full month of return) versus an ordinary annuity (contributions at the end, earning from the next month). Over long horizons the difference is small but real: beginning-of-month contributions are always worth more because they have one extra month of compounding.
If you just finished with Dollar-Cost Averaging (SIP) Calculator, the natural next steps are Compound Interest Calculator, ROI Calculator, FIRE Retirement Calculator, or browse every tool in Cross-border Finance.