SIP Calculator Online
SIP calculator is an important tool that helps you to calculate the returns on your SIP (Systematic Investment Plan) investments. SIPs are a popular investment option where you invest some money at regular intervals, usually monthly, into a mutual fund or other investment vehicle. The SIP calculator considers your investment amount, the investment duration, the expected rate of return, and the frequency of investment, to estimate the returns you can expect from your SIP investment.
What is SIP Calculator?
A Systematic Investment Plan (SIP) is a method of investing in mutual funds in which an investor selects a mutual fund scheme and invests a fixed amount at regular intervals.The SIP calculator is a simulation that allows you to estimate the return on mutual investments made through SIP. Investing through SIPs in mutual fund investment is a popular investment option for millennials. SIP calculators had designed to give potential investors a heads-up on their mutual investments. The actual return from the mutual fund plan varies depending on different factors. The calculator does not account for the expense ratio and exit load. It is a tool to calculate the SIP amount to achieve your investment goals based on an expected yearly return.
Benefits of SIP Calculator:
A few of the benefits of SIP calculators include the following -
- Assists you in determining the amount you want to invest in.
- It tells you the total amount you have invested.
- It Gives an approximate value of the returns.
Types of SIPs Available:
There are four different types of SIPs most commonly available in the Market:
Flexible SIP:
A flexible SIP lets you change the SIP investment amount.
Top-Up SIP:
A top-up also called a step-up SIP, will let you increase your SIP funding amounts at intervals.
Perpetual SIP:
A perpetual SIP is funding that continues indefinitely, meaning there is no fixed end date or tenure to your SIP investment.
Trigger SIP:
A trigger SIP is an investment based on certain trigger events you mention. For instance, everyone may set a trigger that the SIP should double if the NAV of a scheme falls to a certain level.
How can a SIP calculator help you?
According to various mutual fund experts, SIP tools are a more lucrative mode of investing in mutual funds than a lump sum amount. It helps you to convert financially disciplined and create a savings habit that can benefit you in the future. The SIP calculator is a beneficial tool showing the approximate returns you earn after the investment endpoint.
How Does SIP Calculator Work?
A SIP calculator considers several variables related to your SIP investment, such as the investment amount, investment duration, expected rate of return, and investment frequency, and uses these variables to calculate the returns you can expect from your investment.
The SIP formula for SIP calculators uses the following:
FV = P x ([(r + 1)n – 1] ÷ r) x (r + 1)
FV: Future value of an investment
P: Principal contributions per month
n: expected rate of return (every month)
i: Number of contributions through the principal
For instance, if you need to calculate the FV for a SIP with Rs.1,000 monthly contributions for two years and an expected rate of return is 12%, this is what the formula would look like for you:
FV = 1000 x {[( 0.01 + 1)24 – 1] ÷ 0.01} x (0.01 + 1)
Note that the rate of return is 0.01 since our expected r is 12% per annum, which translates to 1% per month.
How to use a SIP Calculator?
To use a SIP calculator, follow these simple steps:
- Open a reliable SIP calculator online.
- Enter the amount that you plan to invest in each SIP instalment.
- Enter the duration of your SIP investment in months or years.
- Enter the expected rate of return on your SIP investment.
- Select the frequency at which you plan to invest in your SIP.
- Click on the "Calculate" button.
- The SIP calculator will display the expected returns on your investment, total investment amount, expected returns, and corpus that you can accumulate at the end of the investment period.
Advantages of using Systematic Investment Plan Calculator:
The best SIP calculator provides the following advantages –
- Plan your investment based on the tenure and amount.
- It helps you estimate the total value of investments at the endpoint of your SIP tenure.
- It shows accurate results and helps you save the time required for a manual calculation.
- A SIP calculator ensures that your savings portfolio meets your requirements and financial needs.
Conclusion:
A SIP calculator is a powerful tool that helps investors plan their investments more effectively and make informed decisions about their financial goals. Providing accurate return estimates saves time and effort in calculations, facilitates comparison of different investment options, and helps optimize investment portfolios.
Faqs:
Can I estimate my SIP return online?
You can use the SIP Calculator and Planner to estimate your SIP returns online. Enter the per month SIP amount, investment period, and expected returns into the SIP calculator and planner to know the estimated future returns from your SIP investment.
What is the Interest Rate of SIP?
SIP returns are market-linked. It means that the returns depend upon the performance of the mutual fund investment you invest in.
When should one stop SIP?
It is understandable why you want to stop your SIP in an emergency. Thus, a mutual fund allows you to withdraw from your Systematic Investment Plans in emergencies.
What is the risk of SIP?
Investing in Mutual Funds via SIP (Systematic Investment Plan) involves Market linked risks that are certainly higher for Equity Funds than debt and balanced Mutual Funds. The risk in SIP depends on the chosen investment option, considering the risk profile, risk appetite and liquidity.
Are SIP calculators correct?
These mutual fund sip calculators had designed to give potential investors an estimate of their mutual fund investments. However, a mutual fund scheme's actual returns vary depending on various factors. The SIP calculator does not clarify the exit load and expense ratio (if any).