SIP Calculator

SIP Calculator Online: Calculate the Returns on Your Mutual Fund Investments

Are you familiar with Systematic Investment Plan (SIP)? It is an investment strategy that allows individuals to make regular investments in mutual funds either automatically or manually. The beauty of SIP lies in the fact that it enables investors to start with small amounts, which can accumulate over time and prove beneficial in the long run.

When it comes to investing, it's essential to determine the monthly amount required to reach your financial goal within a specific deadline. This is where the SIP Calculator online comes into play. Before we discuss how SIP Investment Calculator works, let us understand what Systematic Investment Plan (SIP) means.

Before learning how the SIP fund calculator works, let’s understand what a SIP is.

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan (SIP) is a useful tool provided by mutual funds to help investors save and invest regularly. With SIP, you can make fixed investments in your chosen mutual fund at regular intervals, like weekly, monthly, or annually. The best part is that SIP allows you to invest without worrying about market conditions, thanks to average costing and the power of compounding.

For example, if you want to save Rs. 5.4 lakhs for a trip abroad in three years, you can easily achieve this by starting a monthly SIP of Rs. 15,000. The sooner you start investing, the better! If you begin SIP at age 25, you could potentially retire with around Rs. 2.76 crores. But if you delay starting by just five years, you would have around Rs. 1.54 crores—missing out on a difference of Rs. 1.21 crores. So, don't delay—start your investment journey as early as possible.

What is a SIP Calculator?

The SIP Investment Calculator helps us determine the value of our investment at the end of the investment period.

The maturity amount is calculated by considering the SIP amount, Investment period, and expected interest rate.

Having understood what a SIP Calculator is all about, let us discuss how this can make your investing journey easy.

How does a SIP Investment Calculator work?

Fundamentally, an SIP calculator uses a specific mathematical formula to calculate the value of investments in the future. The formula applied:

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

Where,

FV = Final value or the amount you get at SIP maturity.

P = Amount you invest through your SIP

i = Compounded rate of return

n = Investment duration in months

r = Expected rate of return

Let us take an example to see how it works:

Imagine you invest Rs 2,000 every month for 24 months, with an anticipated annual rate of return of 12% (r).

The formula for the Rate of Return is r/100/12, which equals 0.01.

By applying the SIP formula, you can calculate the Final Value (FV) as follows:

FV = 2000 * [(1.01) ^24 - 1] * (1.01)/0.01

Which gives you Rs. 54,486 in 24 months.

To make this calculation easy and seamless for you, Elearnmarkets has developed an easy-to-use SIP Calculator online. We recommend you use it to get quick and accurate results.

How can a SIP Return Calculator Help You?

Suppose you want to invest Rs. 500 for 10 years, with an expected return of 12%.

Then, with the help of the SIP Investment Calculator, you can get a clear picture that your investment will grow Rs. 1,16,170 in 10 years, as shown below-

Thus, it is a valuable tool, as it simplifies the process and helps plan your investing goals better!

How to use SIP Calculator Online?

To use the systematic investment plan calculator, you need to enter the following numbers based on your mutual fund investment: -

• The amount you want to invest every month
• Number of years for which you want to invest
• Expected annual rate of return (in percentage terms)

SIP Calculator for Mutual Fund

As discussed above, you can use the same formula or the Elearnmarkets SIP Calculator online to calculate your estimated returns from Mutual Funds.

Advantages of using systematic investment plan calculator

The following are the advantages of using systematic investment plan calculator: -

1. Making well-informed decisions: You can avoid making assumptions by using a SIP calculator, which provides predictions based on past data and assumptions. You can experiment with various investment amounts, tenures, and predicted returns using the calculator.
2. Budgeting: You can set financial objectives and plan your investments with the aid of a SIP calculator.
3. Saves Calculation Time: By eliminating laborious manual computations, a SIP calculator can help you save time.
4. Risk control: By estimating future returns and evaluating possible risk, a SIP calculator can assist you in making more secure investment choices.

Frequently Asked Questions

1. What is SIP Investment?

An investment technique called a Systematic Investment Plan (SIP) enables investors to make fixed payments at regular periods. The following are a few varieties of SIP: Set SIP: The investor makes recurring, fixed-amount investments in this kind of SIP.

2. How to calculate SIP Returns?

The formula used by the sip calculator to produce results is fv = p × ({[1 + i]n – 1} / i) × (1 + i). You intend to invest Rs 2,500 every month for the next twelve months, with a 12% predicted return. Then the investment value is Rs. 32,000.

3. How to start SIP Investment?

Here are the steps to start SIP Investment-

• Choose a platform that enables mutual fund investments
• Finish the KYC process, pick a fund
• Decide on a daily amount
• Select daily SIP
•  Connect the bank, approve transactions, and keep a close eye on your assets.

4. Can I pause my investments in a SIP?

You can pause your SIP if the mutual fund company permits it. Different businesses follow different protocols in this regard. If permitted, you can also pause your SIPs on broker platforms. The majority of mutual fund companies allow you to pause your SIP for a maximum of three to six months.

5. Can I modify my SIP amount?

If you wish to lower your SIP/STP or SWP amount, you must terminate your existing SIP and start a new one with the reduced amount.