logo

SIP Calculator

A Systematic Investment Plan (SIP) calculator is free online tool that helps your returns by investing in a specific plan.

Monthly Investment

500

1 Lakh

Expected Return (P.A)

%

1%

20%

Period

Yr

1Y

30Y

Invested

₹0

Estimated Returns

₹0

Growth

%

5 Years Value

₹0

Invested

Returns

Systematic Investment Plans (SIPs) are a popular way for people to invest in mutual funds. But investors sometimes need a little help to estimate potential returns on mutual fund investments made via the SIP route. That’s where SIP calculators come in. They offer a convenient way to plan your finances over a specific period. To learn more about them, read on.

What is an SIP calculator?

An SIP calculator is a tool to help estimate the returns on SIP-based mutual fund investments. It’s important to note that a SIP calculator provides only an approximate estimation and is based on certain assumptions. Actual returns may vary depending on market conditions. Still, an SIP calculator works gives the user some sense of direction. 

 

To use the calculator, you will need to specify the investment amount, investment duration, and expected rate of return. Based on these inputs, the SIP calculator does the math for the specified period and presents the outcome in seconds.

 

Such calculators help individuals analyze the outcomes of their investments, make informed decisions, and think about their investment goals.

How do SIP calculators work?

As discussed above, SIP calculators work by processing the inputs of investors. So one must enter the correct investment amount, duration, and expected rate of return. A calculator of this varity works by using the following formula:

 

M = P × ({[1 + i]^n – 1} / i) × (1 + i)

 

In this equation:

 – M is the amount you receive upon maturity.

 – P is the amount you invest at regular intervals.

 – n is the number of payments you have made.

 – i is the periodic rate of interest.

 

By considering the effect of compounding, these calculators are able to indicate the approximate accumulated value at the end of the investment period.

Benefits of using an SIP calculator

Using an SIP calculator offers several benefits for investors. Here are some of the main ones.

 

  • Financial planning: By doing the math right, an SIP calculator ensures that you can consistently invest in various mutual funds. This increases your chances of reaching all your financial goals while encouraging you to plan your finances effectively.

 

  • Realistic expectations: SIP calculators lay the foundation for realistic expectations. They do this by providing estimated returns based on historical data. This helps investors understand the potential growth of their investments, preventing disappointment or overestimation of returns.

 

  • Compounding power: The power of compounding refers to the ability of investments to generate returns not just on the initial investment but also on the accumulated returns. The longer the investment duration and the higher the rate of return, the more pronounced the effect of compounding becomes. Compounding power is one of the key advantages of SIPs.

 

  • Eliminates timing the market: Because SIPs offer a hassle-free approach to investing, individuals can focus on their long-term financial goals without needing to monitor the market constantly. In other words, investing via the SIP route eliminates the need to time the market. By design, SIP investors buy more fund units when the market is down and fewer when it is up. This reduces the impact of market volatility and helps investors achieve reasonable returns.

How can an SIP return calculator help you?

Using SIPs to invest regularly can be rather beneficial. With lump-sum investing, you are locking in a single, large sum of money. But with the SIP option, your investments are spread out over time. An SIP calculator is primarily beneficial because it promotes SIP investing. The simpler calculating the returns is, the higher the chances that people will invest.

 

An SIP calculator helps you predict how much money you can make through monthly investments. Just enter the relevant information, and in a few seconds you can know how your investment will grow over time.

 

Another benefit of using an SIP calculator is its simplicity and convenience. It saves time by doing all the complicated calculations for you. Such calculators provide instant estimates of your maturity amount and monthly investment. They also present the results in easy-to-understand graphs and tables.

Conclusion

In summary, an SIP return calculator serves as a valuable tool. It empowers investors to make well-informed decisions and align their investments with their financial goals. However, it’s important to note that an SIP calculator provides only an approximate estimation. Actual returns may vary depending on market conditions.

FAQs

1.How much can I invest in an SIP?

chevron_down
The amount you can invest in a SIP can vary depending on your financial situation, investment goals, and risk tolerance. In general, mutual fund companies have a minimum investment requirement for SIPs but it can be as low as ₹100.

2.What is the maximum tenure of an SIP?

chevron_down
The maximum tenure of a SIP can vary, depending on the mutual fund scheme, from several years to decades. That said, it is typically long-term.

3.Can I modify my SIP amount?

chevron_down
Yes, you can modify your SIP amount. Most mutual fund companies provide the flexibility to increase or decrease the investment amount in your SIP.

4.Do SIPs allow only equity mutual funds investments?

chevron_down
No, SIPs do not limit investments to only equity mutual funds. They also allow investments in debt funds, hybrid funds, and other types of mutual funds.

5.What are the types of SIPs available?

chevron_down
There are around five primary types of SIPs that you can invest in—regular SIP, flexible SIP, top-up SIP, trigger SIP, and perpetual SIP.

6.Can I renew an SIP?

chevron_down
Yes, you can renew a SIP mutual fund plan at the end of the period. This will allow you to continue investing in the chosen fund.

7.Can I pause my investment in an SIP?

chevron_down
Yes, you can pause your investments in a SIP. The duration for which you can pause your SIP may vary depending on the mutual fund company’s policies.

Download App Now

chevron_right
iconicon