A SIP Calculator is a financial tool that allows individuals to get an idea of the returns on their mutual fund investments made through SIP.
(Calculate the wealth gain and expected returns from Systematic Investment Plan (SIP) by using this SIP Calculator)
SIP Calculator for monthly investment and lump sum investment options:
There are two SIP calculators available on this page based on your investment type i.e. monthly investment in SIP or lumpsum investment. You have to select one out of the two calculators based on your investment.
This calculator will calculate the wealth gain and expected returns for your monthly SIP investment. Indeed, you get a rough estimate on the maturity amount for any of your monthly SIP, based on a projected annual return rate.
Detailed Information about Systematic Investment Plan and SIP Calculator:
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What is Systematic Investment Plan (SIP)?
Systematic Investment Plan (SIP) is a disciplined way of investing wherein a fixed amount of money is invested in a pre-defined mutual fund scheme at a fixed interval. One can decide the amount, period, and the schemes in which you wish to invest. One can plan different life goals be it such as children’s future, retirement, an international holiday, holiday home, etc.
How does SIP work?
Once you apply for one or more SIP plans, the amount is invested in the mutual funds you have purchased at the predetermined time interval. At the end of the day, you will be allocated the units of mutual funds depending on the NAV of a mutual fund.
With every investment in a SIP plan in India, additional units are added to your account depending on the market rate. With every investment, the amount being reinvested is larger and so is the return on those investments.
Benefits of SIP:
- SIP instills discipline as it is a route that helps you invest a particular amount on a regular basis. A fixed amount gets invested automatically at a fixed interval. One doesn’t need to spend time on a regular basis to put the money to work.
- You can start small and there is no need to have a lot of money to start a SIP. A SIP of even Rs. 500 per month is sufficient to start with. And then depending on the goals and aspirations, one can increase the amount.
- With SIP, you don’t need to worry about timing the markets. Just stay invested irrespective of the market conditions. In doing so, you end up getting more units when the price is low and fewer units when the price is high. This in turn leads to a lower average cost per unit over time which is also called rupee cost averaging.
- Enjoy the power of compounding: With SIP, one can stay invested for a longer period of time. Over time as your investment generates returns, the returns get added to the principal amount and this, in turn, generates more returns. This process gets repeated leading to a big corpus. That’s how the magic of compounding works.
Types of Systematic Investment Plan (SIP):
The types of Systematic Investment Plans are:
Top-up SIP
This SIP allows you to increase your investment amount periodically giving you the flexibility to invest higher when you have a higher income or available amount to be invested. This also helps in making the most out of the investments by investing in the best and high performing funds at regular intervals
Flexible SIP
As the name suggests this SIP plan carries flexibility of the amount you want to invest. An investor can increase or decrease the amount to be invested as per his own cash flow needs or preferences.
Perpetual SIP
This SIP Plan allows you to carry on the investments without an end to the mandate date. Generally, a SIP carries an end date after 1 Year, 3Years or 5 years of investment. The investor can hence, withdraw the amount invested whenever he wishes or as per his financial goals.
When to invest in a SIP?
Systematic Investment Plan (SIP) investments can be started anytime ensuring minimum risk with the correct suitable scheme plan for the investor. It is very important for the investor to choose the scheme which suits his long-term goals well. Hence, there is no suitable time frame within which an investor should start a SIP investment plan, the sooner the better.
What is SIP Calculator?
A SIP calculator is a financial tool that allows individuals to get an idea of the returns on their mutual fund investments made through SIP.
This calculator will calculate the wealth gain and expected returns for your monthly SIP investment. Indeed, you get a rough estimate on the maturity amount for any of your monthly SIP, based on a projected annual return rate.
Use this Systematic Investment Plan Calculator to calculate the wealth gain and expected returns of the SIP account. This SIP Calculator requires some data like – Your monthly deposit amount in SIP or Lump Sum amount, Investment Period (in Months), Return Percentage & Frequency of compounding i.e. annually. After calculation, you will get the Maturity Amount, Invested Amount & Wealth Gain.
SIP Calculator Variables:
This Systematic Investment Plan (SIP) calculator uses some investment variables that most of the SIP calculator requires. These Systematic Investment Plan calculator variables are:
Monthly Deposit Amount: This is a fixed monthly amount that is invested in a Systematic Investment Plan (SIP) scheme. This deposit amount varies from person to person but it must be fixed for this calculator.
Return Percentage: The Return Percentage variable of the SIP calculator that is the expected rate of return from SIP.
Period of Investment: The length of the investment or period for the investment in months is another factor that plays a major role in the Systematic Investment Plan calculator.
Frequency of compounding: The frequency of compounding for a Systematic Investment Plan is Annual.
Maturity Amount: It is the final maturity amount at the completion of the period of investment in the SIP scheme. It is the final maturity amount of SIP.
Invested Amount: It is the amount that has been invested in the SIP scheme without any interest calculation.
Wealth Gain: It is the final gain amount over the invested amount in the SIP scheme.
How to use the SIP Calculator?
Anyone can calculate his maturity returns from his Systematic Investment Plan (SIP) account through the online Systematic Investment Plan (SIP) calculator available on this page with high accuracy.
Following are the steps to calculate the maturity value through this calculator:
- Step 1: Enter the fixed monthly amount that he wants to deposit every month in the Systematic Investment Plan (SIP) or Lump Sum money at one time in the second calculator.
- Step 2: Enter the expected rate of return and investment period in months.
- Step 3: Thereafter choose the frequency of compounding. The frequency of compounding must be yearly or annual.
- Step 4: After submitting all variables required by the SIP calculator, one will get the final Maturity Amount, Invested Amount & Wealth Gain for the investment query.
Systematic Investment Plan (SIP) Calculator Formula:
A SIP plan calculator works on the following formula:
M = P × ({[1 + i]n – 1} / i) × (1 + i).
In the above formula –
- 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.
The rate of interest on a SIP will differ as per market conditions. It may increase or decrease, which will change the estimated returns.
How can a SIP calculator help you?
SIPs are a more lucrative mode of investing funds compared to a lump sum amount according to several mutual fund experts. It helps you become financially disciplined and create a habit of savings that can benefit you in the future.
A SIP calculator online is a beneficial tool, which shows the estimated returns you will earn after the investment tenure.
Few of the benefits of SIP calculators include –
- Assists you to determine the amount you want to invest in.
- Tells you the total amount you have invested.
- Gives an estimated value of the returns.
Advantages of using this Systematic Investment Plan Calculator:
It is the best SIP calculator, which provides the following advantages –
- Plan your investment based on the amount and tenure.
- It helps you compute an estimation of the total value of investments at the end of your SIP tenure.
- Shows accurate results and helps you save time required during a manual calculation.
A systematic investment plan calculator ensures that your savings portfolio is as per your requirements and financial needs.
FAQs about SIP Calculator:
How much can I invest in a SIP?
There is no limit to the amount you can invest in a SIP. The minimum amount that you can invest is Rs. 500 per month.
What is the maximum tenure of a SIP?
There is no maximum tenure of a SIP. You can invest as long as you can. The minimum tenure you can go for is 3 years.
Are SIPs similar to mutual funds?
People often tend to think of SIP as either mutual funds or different than a mutual fund. The fact is that SIP is just a style of investment and not a fund/scheme or a stock/investment avenue. It is an investment vehicle to invest periodically in a fund/scheme of your choice.
Can I modify my SIP amount?
Yes, you can anytime check your returns with SIP investment calculator and increase or decrease the SIP amount
Do SIP allows only equity mutual funds investments?
No, you can invest in debt and hybrid mutual funds through SIP.
How important it is to choose the right date for SIP?
There is a notion that the choice of SIP date plays an important role in the returns. The reality is that the SIP date has very little significance over a long period of time. It is just a date for your convenience – the date of which you would like your bank account to get debited.
Does SIP mean investing only in equity funds?
When it comes to mutual funds there is a general misconception that investing in mutual funds means investing in stocks. The same is felt about SIPs. SIP can be made in an equity, debt, or hybrid scheme. This entirely depends on the investment horizon and risk-taking capacity of an individual. SIPs generally work best for equity and equity-oriented hybrid funds given that these are prone to market fluctuations. However, for investment discipline, one can also invest in debt funds also.
You are here to calculate the wealth gain and expected returns for your monthly SIP investment in Mutual Funds of SBI, HDFC, ICICI, etc. Calculate the wealth gain and expected returns for your monthly SIP investment with this online SIP Calculator.
