SIP Calculator - Calculate SIP Returns

More people have started investing in a systematic investment plan in recent years, mostly known as SIP. To make an informed choice, check your investment strategy using the SIP calculator. The tool will help you predict the result to aid you in investing in the right SIP to get better financial returns. Let us find out the best use of the SIP calculator and everything else you need to know about it- ...Read More

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Pay Rs. 10,000/month

for 15 years

After 30 years

Get Rs.78.34 lakhs1@8% or

Rs. 32.41 lakhs1@4%

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: 1The assumed rate of return (4% p.a. and 8% p.a.) shown in the illustrative example are not guaranteed and they are not the upper or lower limits of what you might get back as the value of your policy depends on a number of factors including future investment performance | The amount shown is for 30-year-old healthy male, 15 years premium payment term, 30 years policy term with Max Life Online Saving Plan (Unit Linked Non Participating Individual Life Insurance Plan | Life Insurance is available in this product)

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What is a SIP Calculator?

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A SIP calculator comes in handy to predict the returns you’ll receive upon investing in a mutual fund. It helps in various aspects such as calculating the accurate results, choosing the right plan, and making you financially independent as an investor.

With a SIP calculator, you can know which plans will benefit you the most in the longer or shorter run. With various plans available in the market, it’s best to be informed before deciding to get the benefits.

SIP Calculation Formula

The SIP calculation is crucial before investing. You will have to enter the figures, and the result will help you compute a better strategy about how much money to invest and whether you will receive the profits you desire. The SIP calculation uses this formula-

FV = P × ((1 + r)n - 1) / r) × (1 + r)

Here’s what the formula stands for-

FV- Maturity amount

P- SIP amount you’ll invest

n- investment duration

r- expected return rate

Suppose you invest around Rs. 5,000 per month for the next 24 months. Now, you expect a 12% return annually; here’s how you can calculate it.

FV = 5000 X ((1+0.01)24 – 1)/0.01) X (1+0.01)The ‘r’ is 0.01 since the expected rate of return is 12% per annum, which means 1% per month.

The maturity amount approximately would be INR 1,36,216

Invested Amount – INR 1,20,000.

Returns approximately– INR 16216

How Does the SIP Calculator Work?

SIP calculator is a tool to estimate a mutual fund’s maturity amount. However, there are two different types of SIP calculators- The lumpsum SIP calculator and the SIP calculator.

You will have to enter your investment amount, frequency, investment duration, and expected returns to know your gains. You must know that the SIP results are ascertained based on compound interest. Your SIP can start from just Rs. 500 to Rs. 10,000 depending upon how much you want to invest.

How Does a SIP Return Calculator Help You?

A SIP return calculator will help you make a well informed decision in terms of investment. With the different SIP types and plans in the market, investors might get confused..

A SIP calculator can calculate the exact amount you’ll receive if you follow your investment strategy. Let’s assume that there are no external risk factors involved that may affect your investment return, and you can get the correct estimate of SIP maturity.

Suppose you plan to buy a house in three years, for which you need to save at least INR 10 Lakhs. You can invest around Rs. 25,000 per month. You expect around a 12% interest rate annually for the next three years.

Upon calculation, you will know that the principal amount invested is Rs. 9,00,000. Your estimated return approximately will be Rs. 1,87,691, and in total approximate return, will be Rs. 10,87,691. Now you can decide if this particular amount is correct to invest.

How to Use the online SIP calculator in India?

An MF SIP calculator online is very simple to use. All you have to do is enter certain pieces of information to calculate your expected returns. However, before doing that, find the mutual fund SIP calculator of your choice. Once that is done, enter the following information:

  • The amount of deposit you will invest regularly.
  • The investment tenure is the period you will continue to invest regularly.
  • The expected rate of return. A Systematic investment plan usually gives an average return of 10-12%.

Once all these details are entered in the MF SIP calculator, the online tool provides you with the result in a matter of seconds.

Advantages of Using the Systematic Investment Plan (SIP) Calculator

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SIP calculator is instrumental for various reasons, and here are the major advantages of using the Systematic Investment Plan Calculator-

1. Plan Your Investment Carefully

The key benefit of using this calculator is that the calculator estimates your investment returns and helps you compare outcomes for choosing different plans. You can experiment with your investment amount or change the years for the investment to know whether it meets your requirements.

2. Get Investment Returns For Ideal Scenarios

With a SIP calculator, you will get results, assuming there will be zero external factors to affect your results. Another benefit of investing in SIP is that the returns are averaged out.

Enter your investment amount, expected interest rate, and plan tenure to get your total maturity amount. We have already mentioned the formula above that a SIP Calculator use to get the results

Balance Your Alternate Investment Plans Accordingly

Once you get the idea of how much money you can invest and the returns you will receive, you can balance the outflow of your money accordingly. Many investors put their money in different plans such as trading, real estate, mutual funds, etc. Once you calculate your maturity amount through the SIP calculator, you can allocate your investment to other investment plans accordingly.

Highlights-

  • Easy to use and provides results quickly
  • Helpful in selecting the right SIP
  • Calculate your maturity amount for ideal scenarios

What Is SIP?

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A Systematic Investment Plan or SIP is offered by mutual funds to encourage investors to invest in a disciplined and distributed manner. By investing in a SIP, investors can invest a particular amount every month for a fixed period. The investment mentioned above can range as low as Rs. 500 to Rs. 20,000 and above depending upon the investor. The SIP offers long-term benefits because of the return rate and is not subjected to market dynamics - all thanks to the concept of averaging out.

Benefits of investing in SIP-

  • Investing in a SIP will help you become more financially stable in the long run and make it easier to achieve your goals.
  • You can start investing in SIP as early as you want to grow your corpus.
  • With the compounding strategy, you will get an opportunity to grow your investments.

What Are the Types of SIPs?

Investment in SIP can bring discipline by building healthy investment habits in investors. A SIP calculator is important as various SIPs are available in the market for investors to choose from. Take a look-

Perpetual SIP

In this SIP, you can invest in a plan of your own choice for a fixed tenure which can range from 5 years to 20 years, depending on your requirements. Here, investors choose not to enter the end date in the mandate making it a perpetual SIP. The investor can redeem the amount at maturity and achieve the goals set in the beginning.

Top-Up SIP

In Top-up SIP, you can increase the SIP amount and get the advantage of investing in top-performing mutual funds schemes. You can achieve your goals early and increase your corpus money with the increasing investment amount.

Flexible SIP

As the name suggests, you can increase or decrease the amount per your choice or market volatility. You can also skip paying instalments in case your financial situation is unstable. Also, you can deposit extra when your financial status gets stable, and you can cover up the losses. In a flexible SIP, you get the flexibility to change the amount before 7 days from the deposit date of your SIP investment.

Trigger SIP

You can set a trigger for your SIP by setting a particular amount to be withdrawn from the account. Set an event, date, and index level to trigger the SIP investment. Though it is advised not to set a trigger, it may create a problem if you ever struggle financially. If you are just a beginner, invest in a long term tenor and refrain from investing in Trigger SIP as it is for experienced investors possessing knowledge of the investment market.

How to Invest in SIP?

Knowing which SIP to invest in and how much to invest is crucial. SIP is a disciplined investing method to grow money in the long term. Till December 2021, around 19.5 million SIPs have been registered. Here’s how you can invest in a SIP-

  • Select the suitable fund, investment date and amount

    • Select a SIP and decide the amount you want to invest. Make your financial plan, and select the plan accordingly. For example- if your goal is to invest long term, you can check equity funds. Check the past performance and the benefits that you will get. Select the date of SIP of depositing the fund each month. Set a reasonable goal that is equally sustainable. Here are the steps to invest in SIPs-

    • Visit the website of your preferred SIP
    • Create your account and finish the E-KYC
    • Read all the rules and regulations
    • Set up your monthly payment plan
    • Now kick-start your SIP.
  • Before starting a SIP, here’s what you need to remember-
    • Never stop a SIP in between.
    • Keep a check on your fund and be committed to your goal.
    • If your income is increasing, increase your investment amount as well.
    • Create a goal for your SIP as it will motivate you to save money.

    Other Investment Plans Which Provide Good Returns

    It’s best to invest in a plan without any lock-in period, as you can dabble in it without losing out on your money. The motive of investing is to save money and get higher returns. There may be numerous reasons you are investing; it could be for a house, wedding, education or repaying a loan. Therefore, you need to be smart and aware.

    Benefits of investment-

    • Investing will help you improve your finances
    • You can plan your money more efficiently
    • You can easily prioritize your expenses and decrease your liabilities
    • You can let go of debts and lead a stable life
    • You will be more prepared for emergencies
    • You will be more independent financially

    Here are the best investment plans for you to look into-

    1. Gold

    Gold is the oldest form of investment for Indians, as every household has some other gold possessions. You can invest in gold in three ways- via Exchange Traded Funds, Physical forms and Sovereign Gold Bonds.

    2. RBI Bonds

    The taxable bonds have a tenure of 6years and give a 8 percent interest rate. There is zero credit risk as the RBI issues the bonds. If you’re looking for better returns and a nomination facility, RBI Bond is the safest option.

    3. Fixed Deposit

    Considering it one of the safest options, most investors prefer to invest in SIP. There are various benefits of investing in FD, such as fixed and higher returns, compounding benefits, and zero effect of market fluctuations. There are cumulative and non-cumulative investment options for investors. Fixed Deposit provides financial stability and easy renewals.

    4. Mutual Funds

    Mutual funds are the ideal investment plan for individuals new at investing, providing moderate to high returns on investment. With their knowledge and skills, a fund manager assists you in selecting better plans, exemptions from wealth taxes, and transparent investments. Though in mutual funds, the returns depend on the market. There are two types of mutual funds- Equity and Debt mutual funds.

    5. Unit Linked Insurance Plans

    ULIP is one of the favorites among investors as it offers tax exemption and dual benefits. However, there’s a lock-in period of 5 years where one part is directed towards the insurance coverage. ULIP is flexible as you can invest according to your capacity; you can gain maximum benefits, and the maturity is tax-free.

    On An Ending Note

    SIPs are a beneficial way to grow your corpus for future purposes, and a SIP calculator will help you make the correct investment decision. You can use a SIP calculator and check your strategy accordingly before choosing a plan to invest in.

    Frequently Asked Questions

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    The SIP returns vary depending whether you are investing in a large-cap equity, mid-cap or debt-based fund.
    There’s no fixed amount when it comes to investing in a SIP. Your limit should depend on your affordability and financial goals.
    Based on your financial goals, you can simply invest in a SIP for a year or make it perpetual. Use a SIP calculator to know your gains and make a plan accordingly to get maximum benefits.
    SIP is an investing method in mutual funds, a process through which you can contribute a particular amount every month for a fixed period and get fixed interest. At the same time, mutual funds are where investors invest their money in various assets such as bonds, equity and more to earn higher returns.
    An investor can increase or reduce his SIP amount, by first cancelling the existing mandate and giving the revised one. Fund houses do not charge any penalty for stopping the SIPs
    There are four different types of SIPs available in the market- trigger SIP, flexible SIP, Perpetual SIP and top-up SIP.
    SIPs are beneficial in many ways. It offers a disciplined method of saving money over a fixed period. You can get financially stable, make yourself debt-free and save money for future investments.
    A SIP continues till the end date mentioned in the application form. A few mutual funds now offer the option to ‘pause’ the systematic investment for a limited period.
    For beginners, SIP is a better option than the lumpsum investment. Lumpsum is for investors with broad knowledge of investment and market trends or if they have a risk appetite.

    First login to the website, enter your bank account and folio number and keep your PAN ready. Select the SIP you want to cancel, and select the Cancel SIP option. After some time, your SIP will be cancelled. Your MF investment will remain as funds until you request redemption or a switch.

    Yes, you can definitely start a SIP online. To do the same, choose the mutual fund house of your choice and register on their investment platform to start a SIP investment.

    To renew your SIP, you have to instruct the AMC of your choice at least 30 days before the last date.

    Yes, you can reduce your SIP amount if you have chosen flexible SIP.

    The SIP returns can be calculated using this formula,

    FV = P [(1+i) ^n-1] * (1+i)/I

    Returns earned through SIP are applicable for tax deductions. However, the way they are taxed depends on the duration. Long Term Capital Gains and Short-Term Capital Gains are applicable to the returns earned.

    ARN:PCP/SIPC/200223

    1The assumed rate of return (4% p.a. and 8% p.a.) shown in the illustrative example are not guaranteed and they are not the upper or lower limits of what you might get back as the value of your policy depends on a number of factors including future investment performance | The amount shown is for 30-year-old healthy male, 15 years premium payment term, 30 years policy term with Max Life Online Saving Plan (Unit Linked Non Participating Individual Life Insurance Plan | Life Insurance is available in this product)

    Sources:

    www.markcalculate.com/finance/sip-calculator

    www.economictimes.indiatimes.com/industry/banking/finance/what-is-sip-types-of-sip-how-it-works/articleshow/77991976.cms

    www.business-standard.com/article/markets/sip-registrations-in-fy22-already-at-five-year-high-shows-data-122011301615_1.html

    www.indiainfoline.com/knowledge-center/mutual-funds/how-to-invest-in-systematic-investment-plan

    www.rbi.org.in/Scripts/BS_ViewSavingBonds.aspx?Id=1116#:~:text=Maturity%20and%20rate%20of%20interest,1601%2F%2D.

    www.economictimes.indiatimes.com/what-happens-on-surrendering-a-ulip/tomorrowmakersshow/52326385.cms

    www.economictimes.indiatimes.com/wealth/save/everything-you-wanted-to-know-about-sip/can-you-change-the-sip-amount/slideshow/59914661.cms

    www.economictimes.indiatimes.com/industry/banking/finance/what-is-sip-types-of-sip-how-it-works/articleshow/77991976.cms

    www.economictimes.indiatimes.com/wealth/invest/mutual-fund-investments-how-to-pause-your-sip/articleshow/53237202.cms

    www.economictimes.indiatimes.com/wealth/invest/how-to-cancel-your-mutual-fund-sip-instruction/to-cancel-online/slideshow/75625666.cms

    groww.in/calculators/sip-calculator

    economictimes.indiatimes.com/mf/analysis/et-wealth-how-to-renew-sips-of-mutual-funds/articleshow/15079190.cms?from=mdr

    fi.money/blog/posts/what-are-the-taxes-on-returns-from-sip-investing-in-mutual-funds

    cleartax.in/s/sip-calculator/

    groww.in/calculators/sip-calculator

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