SIP Calculator: Calculate Mutual Fund Returns With SIP Calculator Online
A Systematic Investment Plan (SIP) Calculator refers to a tool available online that helps you compute the estimated returns on your SIP investments. With a SIP calculator, you can get a better idea of how much you should invest to reach your goal.
Note that this online tool does not calculate the actual returns as it does not take into account various factors, for example, the expense ratio of the mutual fund scheme. So, if you’re considering investing in SIP, use a SIP calculator to plan your investments diligently.
To know how a SIP investment calculator works, read on!
SIP Returns Calculator
Monthly Investment
Expected return rate (p.a)
%
Time Period (Years)
Invested Amount
0
Est. Returns
Total Value
How Does a SIP Calculator Work?
A mutual fund SIP return calculator has been designed on the basis of the formula of compound interest. You can understand how it works by taking a look at this formula:
A = P [{(1+i)^n-1} ÷ i] x (1+i)
Here,
- A = Future value, i.e. the total portfolio value at the end of investment tenure
- P = The amount one invests at fixed intervals
- i = Compounded rate of interest
- n = Investment tenure (in months)
Example:
Suppose an individual invests Rs. 2,500 every month for a period of 3 years, and the expected rate of return is 15%.
In that case, i = 15 ÷ 100 ÷ 15 = 0.01
As per the above formula, the future value will be Rs. 1,14,199. The total estimated returns will be Rs. 24,199 following an investment of Rs. 90,000 over a period of 36 months.
Benefits of Using SIP Investment Calculator
Here are some of the advantages of using a systematic investment plan calculator:
- Assists in Financial Planning: Helps you to plan your investment on the basis of your financial goals and time horizon
- Saves Time: Displays accurate results quickly after investors enter the required values. Thus, this financial tool enables individuals to save time taken for calculating the estimated returns manually.
- Lucid Interface: It’s extremely easy to use. You need to enter only a few details to calculate the estimated returns that you can earn on your SIP investment.
Now that you know how a mutual fund SIP calculator works, it is imperative that you understand the concept of a systematic investment plan.
Also Read
Types of SIPs
Here are some of the most popular types of systematic investment plans:
- Flexible SIP: Commonly referred to as Flexi SIP, this type of systematic investment plan allows you to alter the instalment amount according to your convenience. If you have worries about the market scenario or have cash flow concerns, you can consider opting for a flexible SIP.
- Top-up SIP : A top-up/step-up SIP allows investors to raise their instalments by a fixed amount at regular intervals. For example, let’s say that you start investing Rs. 2,000 every month in an index fund. You can instruct the asset management company to increase the instalment amount by Rs. 500 every six months. Thus, post completion of the six months, you’ll be paying Rs. 2,500 for the next six months, and so on.
- Perpetual SIP : Investors may choose to invest in a mutual fund scheme for a fixed period of time. In that case, they have to mention the start as well as the end date of their investment. However, if individuals do not mention the end date in the SIP mandate, it is a perpetual SIP investment. In case you choose this option, you can continue investing in a mutual fund scheme via SIP for as long as you want. In case you want to stop the SIP, you’ll have to instruct the fund house to do so.
How to Invest via SIP?
To invest via a systematic investment plan, investors need to follow these steps:
- Step 1: Select a mutual fund scheme based on your financial goals and risk appetite
- Step 2: Choose the duration of investment
- Step 3: Complete the KYC process and submit the application form via online or offline mode.
Final Word
Now that you know how a SIP calculator works, make sure to use it to plan your investment and reach your financial goals in the best possible manner. With adequate planning, you will be able to build a savings portfolio as per your needs. In addition, you will be able to grow a large corpus of money over the years.
With Navi Mutual Funds, you can start your SIP with a nominal amount of Rs. 500. In return, you get to enjoy the lowest expense ratio with no entry and exit load. All you need to do is download the Navi app and start investing right away.
FAQs
Ans: On account of the auto-debit facility, the instalment amount for your SIP investment gets debited from your bank account automatically on the predetermined date. However, if you don’t have a sufficient balance in your bank account or you don’t have an auto-debit set up and failed to pay your SIP obligations consecutively for 3 months, your SIP plan could get cancelled.
Ans: In case you don’t have adequate funds on the SIP date, you’ll miss an instalment. Note that you do not need to pay any penalty. Moreover, the SIP investment remains active. However, if you miss the instalments multiple times, the SIP gets cancelled.
Ans: For SIP investments, there are no restrictions related to the duration of the investment. You can invest in a mutual fund scheme for as long as you want.
Ans: SIP is simply a way of investing in a mutual fund. The taxability of mutual funds is entirely based on the type of fund you’re investing in and the period of investment. If you’re investing in equity-linked saving schemes (ELSS funds), your returns could be tax-free. However, this entirely depends on the investment period timeline.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
