One instalment a year. What does it mature to?

How the annual SIP calculator works

Each yearly instalment is invested at the start of the year and compounds annually. While you are still contributing, that is the future value of an annuity-due:

FV_stop = A × [ (1 + r)ⁿ − 1 ] ÷ r × (1 + r)

Once the instalments stop, nothing is added — the corpus simply keeps growing for the remaining years:

FV_maturity = FV_stop × (1 + r)^{(H − n)}

where A is the yearly amount, r the annual return, n the number of instalments and H the total years you stay invested.

Planning a child's or minor's portfolio

This is the common shape of a minor's folio: a parent or grandparent funds it for a fixed stretch of years, then it sits untouched until the child needs it. Separating the two periods matters, because the years after the last instalment usually do the heaviest lifting.

Take a one-year-old with ₹1 lakh invested every year for 10 years, at an assumed 12%. When the instalments stop at age 11 the folio is worth about ₹19.7 lakh. Left alone, it reaches roughly ₹43.5 lakh at age 18 and about ₹96 lakh at age 25 — the ₹10 lakh contributed is unchanged, but seven extra years of compounding more than double the outcome, and fourteen more nearly quintuple it. Set the yearly amount to your own figure and read the two maturity values off the slider by moving "stay invested for" between 17 and 24 years.

Things to check on a minor's folio

• The folio is operated by a guardian until the child turns 18. Only the guardian can transact, and the minor cannot be a joint holder.
• At 18 it freezes. Until minor-to-major status change paperwork and fresh KYC are completed, no redemption or SIP debit goes through — start that process ahead of the birthday if the money is needed then.
• Any standing SIP mandate stops at 18, so a plan that runs past that age needs a new mandate in the (now adult) investor's own name.
• Gains are taxed in the minor's hands after 18, and generally clubbed with the parent's income before that. Worth confirming for the specific case.

Yearly or monthly?

Monthly instalments smooth entry price better and suit salary income. A single yearly instalment suits a bonus, a farm or business cycle, or a gift funded once a year — and it is far simpler to administer on someone else's folio. If you want the monthly equivalent, use the SIP calculator.

Related calculators

• SIP calculator — monthly instalments.
• Lumpsum calculator — a single one-time investment.
• Goal SIP calculator — work backwards from a target amount.
• Inflation-adjusted SIP calculator — price the goal in today's money.