SIP Calculator, helps you to find the best monthly investment idea. Estimates the future returns of the investment made through SIP.
To use Our SIP Mutual Funds Calculator, Please enter your Monthly Investment Amount, Investment Time, and Expected Annual Returns Numbers in the boxes below, then click on the “Calculator” button.
A SIP Calculator is an investment tool that
calculate the potential returns on investments made through a Systematic Investment Plan (SIP) in mutual funds. People who have started investing in the mutual funds scheme of banks, who do not know much about it, keep putting small amounts in it weekly, monthly. All the financial goals of the investor are benefits achieved through SIP Mutual funds.
People should invest 30% of their monthly income in SIP. So that they can get good returns. Invest for 1 year after wealth gain.
How to Calculate SIP Returns?
SIP return calculator works on a set rules. Which you earn on some Expected Annual Returns percentages on Monthly Investment for a certain time.
Let’s take an example to understand the workings of a SIP calculator with this formula.
FV = P [ (1+i)^n-1 ] * (1+i)/i
FV = Future value or the amount you get at maturity.
P = Amount you invest through SIP
i = Compounded rate of return
n = Investment duration in months
r = Expected rate of return
Suppose you invest Rs 5,000 per month for a tenure of 36 months.
You expect a 10% annual rate of return (r).
You have i = r/100/12 or 0.008333.
FV = 5000 * [(1+0.008333) ^36 – 1] * (1+0.008333)/0.008333
You will get Rs 2,10,650 at maturity.
Benefits of SIP calculators?
SIP Calculators is an investment plan calculator tool for those who find it very difficult to calculate. Either they are not able to invest. By taking the benefits of online calculator, they can do this and plan their future financial goals.
Is a Systematic Investment Plan (SIP) Calculator Accurate?
While SIP Mutual Funds Calculators can provide an approximate idea of your possible returns, they cannot replace expert financial guidance. Several factors, such as the investor’s risk tolerance, investment horizon, and rate of return, influence the accuracy of a SIP calculator’s estimate.
It’s essential to keep in mind that market performance is unpredictable, and prior returns don’t guarantee future outcomes. If you’re planning to invest in a mutual fund, it’s crucial to consult a financial advisor to receive tailored recommendations that consider your specific situation.
How sip works?
A Systematic Investment Plan (SIP) is a method of investing in mutual funds that allows investors to regularly contribute a fixed amount of money at pre-defined intervals (usually monthly or quarterly) over a period of time. Here’s how SIP works:
Choose a Mutual Fund: The first step is to select a mutual fund scheme in which you want to invest through SIP. Mutual funds offer various options, such as equity funds, debt funds, balanced funds, etc. Consider your financial goals, risk tolerance, and investment horizon while choosing the fund.
Set Investment Amount and Frequency: Once you’ve chosen the mutual fund, you need to decide on the investment amount you want to contribute regularly. This amount can be as low as a few hundred units of the fund. Also, choose the frequency of your investments, such as monthly or quarterly.
Submit SIP Registration: To start a SIP, you need to submit a SIP registration form to the mutual fund house or through your online investment platform. This form contains details such as the mutual fund scheme, investment amount, frequency, and bank account information for the automatic deduction.
Automatic Deduction: On the pre-defined dates chosen by you (e.g., 1st of every month), the SIP amount is automatically deducted from your bank account. This makes it convenient as you don’t have to remember to invest each time.
Units Allocation: The SIP amount deducted from your bank account is used to purchase units of the chosen mutual fund scheme at the prevailing Net Asset Value (NAV) on that particular date. NAV is the value of each unit in the mutual fund scheme.
Market Fluctuations: Since you are investing at regular intervals, your investments benefit from rupee cost averaging. When the market is up, you buy fewer units with the same amount, and when the market is down, you buy more units with the same amount. This helps reduce the impact of short-term market fluctuations on your investments.
Accumulation: Over time, as you keep contributing to your SIP, the number of mutual fund units in your account grows. The total value of your investment is the product of the number of units and the current NAV of the mutual fund.
Redemption: You can redeem (sell) your mutual fund units partially or entirely whenever you need the money or to meet your financial goals. The redemption process is similar to regular mutual fund investments.