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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 Calculator works, let us understand what Systematic Investment Plan (SIP) means.

What is 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 return Calculator?

A SIP calculator is a user-friendly tool that helps individuals estimate the potential returns on their mutual fund investments made through SIP. Recently, SIP investments in mutual funds have become highly popular among millennials as an investment option.

These calculators are specifically designed to provide potential investors with an estimate of their mutual fund investments. However, it's important to note that the actual returns offered by a mutual fund scheme may vary due to various factors. The SIP calculator does not account for exit loads and expense ratios, if applicable.

By using this calculator, you can determine the wealth gain and expected returns for your monthly SIP investment. It provides a rough estimate of the maturity amount based on a projected annual return rate.

How does a SIP Calculator work?

A simple growth rate shows how an investment will perform throughout its time horizon. In contrast, the compound annual growth rate represents the average rate of return necessary for an investment to increase from its starting balance to its end balance annually. This calculation can be made regardless of the investment's time horizon. The compounded annual growth rate also enables you to evaluate investments over various time horizons.

What is the formula for Simple Growth Rate?

The SIP investment calculator works on this formula-
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 to use SIP Calculator Online?

You can calculate SIP using Elearnmarkets SIP Calculator online with just a few clicks.

Simply enter:
The monthly invested amount (the amount you've allocated for your SIP),
Your investment duration in years, and
The expected rate of return

Once you input these values and click on the CALCULATE NOW button, the calculator will swiftly generate an estimate of the amount you can expect to receive at the end of your investment tenure.

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.

SIP Calculator- FAQs

What is the difference between SIP and Mutual Funds?

While SIP and Mutual Funds may seem similar, they are not the same. Many investors find these terms confusing, but let's simplify it.

Mutual funds are investment vehicles where an asset management company (AMC) creates a pool of assets. Investors, in return for their investment, receive ownership in the form of units. They have the freedom to choose the investment scheme that aligns with their risk tolerance and financial goals.

On the other hand, a Systematic Investment Plan (SIP) is an investment strategy that allows investors to invest systematically over a period of time. It helps them build a corpus to fulfill their investment objectives. SIP is not separate from mutual funds but an integral part of it.

In summary, mutual funds and SIP go hand in hand. Mutual funds refer to the overall concept of investing in asset-backed schemes, while SIP is a specific strategy within mutual funds that enables systematic and disciplined investments over time.

What is the 15x15x15 rule in SIP?

This rule is a basic principle that can help you become a crorepati (a millionaire).

Here's how it works:

If you invest Rs 15,000 every month for 15 years in a stock that provides a 15% annual interest rate, you can accumulate Rs 1,00,27,601 by the end of the 15-year period. You invested just Rs 27 lakh but earned Rs 73 lakh.

But it gets even better! If you continue this strategy for another 15 years, your accumulated wealth will grow exponentially. Following the 151515 rule, you can accumulate a massive amount of over Rs 10 crore, specifically Rs 10,38,49,194. You would have invested only Rs 27 lakh and ended up earning Rs 9.84 crore.

How can I calculate my SIP?

The formula for calculating SIP is-

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

Where,
FV = Final value or the amount you get at SIPmaturity
P = Amount you invest through your SIP
i = Compounded rate of return
n = Investment duration in months
r = Expected rate of return

If you are looking to avoid complicated calculations, use Elearnmarkets SIP Calculator for accurate and quick results.

Which SIP is best for 1 year?

When considering a SIP investment for one year, it is important to note that SIPs are generally considered a long-term investment strategy. They are designed to benefit from the power of compounding over time.

However, if you have a specific requirement for a one-year investment horizon, you may consider short-duration debt funds or ultra-short-duration debt funds. You can check out these mutual fund schemes to get started. These funds invest in fixed-income securities with shorter maturities, aiming for relatively stable returns over a shorter time frame.

It's recommended to consult with a financial advisor or do thorough research before selecting a specific SIP or fund. Factors such as your risk tolerance, investment goals, and market conditions should be taken into account when choosing the best SIP for a one-year investment.

Can I withdraw SIP anytime?

Yes, you can withdraw from your SIP investments at any time. SIP (Systematic Investment Plan) and withdrawal are separate processes, so there is no specific restriction on withdrawing from a SIP. However, it's important to note that if you redeem your SIP investment before a specified period, an exit load may be charged by the mutual fund. The exit load amount will depend on the holding period of each SIP installment.

It's recommended to check the terms and conditions of the specific mutual fund scheme you are invested in regarding any exit load charges.

Can I modify my SIP amount?

Yes, you have the flexibility to edit or skip your SIP at any time according to your preference. It's important to note that if you submit an Edit SIP request less than 2 working days before your next installment, the changes will be processed after the upcoming installment.

Can I estimate my SIP return online?

Yes, you can. You have the option to utilize Elearnmarkets SIP Calculator to conveniently calculate and estimate your SIP returns online. By entering the monthly SIP amount, investment period, and expected returns into the online SIP calculator, you can determine the projected future returns from your SIP investment.

Is SIP safe for the long term?

Investing in SIP for the long term is highly recommended. Rather than waiting and accumulating a large sum of money, you can start investing whatever amount you can save. This ensures that your money is continuously invested.

Moreover, by choosing the long-term approach, you protect your investment from the impact of short-term market volatility. This strategy allows you to stay focused on your goals without being swayed by temporary market fluctuations.

Is SIP tax-free?

No, SIP (Systematic Investment Plan) itself is not tax-free. The tax treatment of SIP depends on the type of investment instrument or mutual fund scheme in which you are investing through SIP. Taxation varies based on factors such as the holding period, type of gains, and applicable tax rates. We recommend you consult a tax professional for personalized guidance.

If you are searching for tax-saving funds that give better returns than PPF and fixed deposits, you can look for funds that have the lowest lock-in period of just 3 years among all the options available in Section 80C.

What is the maximum amount to invest in SIP?

You can invest any amount in a SIP without any restrictions.

What is the best duration for SIP?

The best duration for SIP (Systematic Investment Plan) depends on your financial goals and objectives. Generally, SIPs are recommended for long-term investments of 5 years or more to take advantage of compounding and reduce the impact of market fluctuations.

However, it's important to consider your risk tolerance, specific goals, and investment timeframe. Consulting a financial advisor can help you determine the ideal duration for your SIP based on your individual needs.

What if I invest 10000 in SIP for 5 years?

If you invest Rs. 10,000 every month in SIP for 5 years, your total investment amount would be Rs. 6,00,000. The returns you earn from SIP will depend on how well the investment performs, like a mutual fund or other assets you choose.

It's important to remember that the actual returns can vary because they are affected by market conditions and the specific investment you make. SIPs come with risks because the value of your investment can go up or down. While past performance can give you an idea, it doesn't guarantee future returns.