SIP Calculator: Systematic Investment Plan Calculator
Calculate your expected returns below by entering the amount you want to invest, tenure of investment, and the expected rate of return
Systematic investment plan (SIPs), today, attract nearly Rs.8,500 crore of inflows into Indian mutual funds each month and the SIP AUM accounts for over 40% of the overall AUM of the equity fund segment. The mutual fund SIP calculator helps you estimate how much returns you can earn on a SIP. The SIP calculator returns two kinds of output. Firstly, it tells you how much your SIP would grow into over a period of time at an assumed rate of return. Secondly, the MF calculator SIP also tells you how much of monthly SIP investment you need to do to reach your target corpus for your financial goals.
The SIP calculator is a two way product that helps you estimate the target amount both ways. The SIP calculator either tells you the target amount or the target SIP saving required per month. Let us look at some more nuances of the SIP calculator in greater detail.
What is SIP calculator?
The SIP Calculator or the Systematic Investment Plan Calculator is a numerical analysis of your SIP. Normally, the SIP is popularly used to meet your long term financial goals and hence the SIP calculator becomes an important tool. You can understand the SIP calculator as a tool that helps you to determine the returns you can earn when parking funds in a mutual fund. As you know, SIPs can be weekly, monthly or quarterly but monthly SIPs are the most common as they sync with the monthly income flows of individuals. Let us now get down to SIP calculator 101.
A SIP calculator is a tool that enables an investor or potential investor to get an estimate of the returns on their mutual fund investments made through SIP route. These mutual fund SIP calculator is designed to give investors an estimate at two levels. You can either estimate how much a particular SIP amount would grow to over a fixed period of time at an assumed rate of return. Alternatively, it tells you how much monthly SIP you need to save and at what returns for how much period to reach a target sum. However, the actual returns offered by a mutual fund scheme varies depending on various factors, so you must keep in mind that these are just estimates.
In terms of output, they normally tell you the total corpus, the value addition, net of contribution and the wealth ratio.
COMPONENT OF SIP CALCULATORS
There are some key components of the SIP calculator and let us look at it from both directions.
- The SIP corpus calculator needs the monthly SIP amount, step-up if any, CAGR return annually, time period, date of SIP etc as the inputs to calculate the target that the SIP would grow into.
- The SIP contribution calculator needs the final target amount, step-up if any, CAGR return annually, time period, date of SIP etc as the inputs to calculate the target monthly SIP contribution requited.
HOW DOES SIP CALCULATOR WORK?
Here is how a SIP calculator works in practice.
- It helps you in determining the amount you should o invest in SIPs to reach a target corpus after a certain years
- SIP calculator also tells you the target amount your existing SIP will grow into based on your assumptions.
- The SIP calculator breaks up your corpus into your contribution and investment returns and gives you an idea of the wealth ratio.
The return on SIP will differ as per market conditions. It may increase or decrease, which will change the estimated returns. Make your assumptions properly.
HOW CAN A SIP RETURN CALCULATOR HELP YOU?
SIPs are a lucrative way of investing funds compared to a lump sum amount according to mutual fund experts. It helps you become financially disciplined and create a habit of saving in a meticulous fashion. The SIP calculator online is a beneficial tool which helps you with the numbers of estimated returns you will earn after the investment tenure or the SIP calculator can also tell you the amount of SIP you need to structure.
HOW TO USE SIP CALCULATOR
You can use a SIP calculator in two ways. Firstly, you can use it to estimate the corpus you can create with a monthly SIP contribution based on tenure and yield assumptions. Secondly, you can also use the SIP calculator to estimate the monthly SIP amount required based on the target corpus.
You must be ready with your key assumptions like rate of return and the tenure and these must be well thought through.
FREQUENTLY ASKED QUESTIONS (FAQs)
How much can I invest in a SIP?
There is no limit to how much you can invest in a systematic investment plan or SIP. It has to be determined based on your goals and what is the corpus you propose to achieve. Normally, the minimum SIP amount that most AMCs accept is Rs.500 per month.
What is the maximum tenure of a SIP?
There is nothing like a maximum tenure of a SIP. You can define a tenure of SIP and it can be 1 year or 5 years or 10 years depending on your choice. Alternatively, you can also opt for a perpetual SIP wherein the SIP will continue by default till you actually cancel the SIP.
Are SIPs similar to mutual funds?
SIPs are a way of investing in mutual funds. Normally, SIPs are more popularly with equities than with debt and more popular with retail investors. SIP is a structure wherein you invest a fixed sum each month on a set data in a particular fund. The amount remains the same through the year so you get the benefit of rupee cost averaging. That means; when the NAV goes up you get more value and when the NAV goes down you get more units.
Can I modify my SIP amount?
You can modify the SIP amount at any time of time, either online or offline. You need to give the AMC at least 1 month advance intimation and in case the SIP is an auto-debit SIP, then it takes more time as the bank has to also be simultaneously intimated. Another way is to modify your SIP in a systematic way each year by using a stepped-up SIP wherein your monthly SIP outlay will go up by a certain percentage or amount each year.
Can I miss an SIP?
Normally, SIPs are long term investments for your financial goals so it is advisable not to miss SIPs. However, due to temporary financial constraints, should you want to temporarily stop a SIP, you can do the same by intimating the fund about a temporary freeze. The SIP automatically starts once again once the freeze period is over.
In which mutual fund should I start SIP?
Normally, most SIPs are done on equity funds as the main purpose of SIP is to plan systematically and get the benefit of rupee cost averaging. A few basic rules can be followed here. Don’t opt for funds that are too small in terms of AUM. An AUM of at least Rs.1,000 crore for the fund must be your cut-off. Look at past returns and also look at the consistency of returns before zeroing in on the SIP fund.
How to shorten SIP duration?
You can shorten the SIP tenure by making an application to the AMC for the same. Actually, that is not really necessary. Even if you take a perpetual SIP, you can terminate the SIP at any point of time depending on your choice. Of course, don’t lose sight of your long term financial goals.
What are the types of SIPs available?
There are many variants of SIPs available. There are fixed SIPs, which are the most common. Then there are stepped-up SIPs and there are also balloon SIPs depending on your core objective.
Benefits of Mutual Fund SIP Calculator
SIP in Mutual Funds help indisciplined investing on regular intervals and create wealth through SIP with small investments.
Avoid Market Volatility
No need to worry aboutthe right time to enter markets. Amount is invested in market on monthly basis, hence the impact of market volatility is averaged out.
Convenient & Automated
Start SIP with as small as 500,making it convenient for investment. Track your investments easily, any time and anywhere through our website and app.
SIP gives you flexible approach ofchanging investment amount/ cancelling SIP/changing tenure of SIP.