Sip calculator: Systematic Investment Plan (SIP) for investment in mutual funds has become the most popular method among retail investors nowadays. The popularity of SIP can be gauged from the fact that in December 2024 its record was inflated by ₹ 26,459 crore, which for the first time crossed the mark of ₹ 26,000 crore. This is more than an inflow of ₹ 25,320 crore in November 2024.
What is SIP?
Systematic Investment Plan (SIP) is an investment medium in which investors invest a certain amount in Mutual Funds at regular intervals. It is a discipline investment process, in which investment can be made on a weekly, monthly or quarterly basis. SIP helps investors to create large funds with small contributions and they get the benefit of compounding in long periods. Its specialty is that despite the market volatility, it gives investors a chance to buy units at average cost, which increases the chances of better returns.
SIP Calculator-
SIP calculator is a simple tool with the help of which investors can estimate possible returns on their mutual fund investment. In today’s era, investment in mutual funds through SIP i.e. Systematic Investment Plan has become the most popular option among youth of 20-30 years.
The SIP calculator is designed in such a way that it informs potential investors about the estimated return on their mutual fund investment. However, the real return depends on many factors, such as market status, scheme display and other economic factors.
This calculator gives information about potential wealth gains and estimated returns during investment. However, it does not account for exit load and expense ratio, which may be imposed during investment.
SIP calculator gives you an estimated maturity amount based on your monthly SIP investment amount. This estimate is based on a projected annual return rate, allowing investors to make a better plan of their financial goals.
SIP Return Calculator: Understand the beneficial tool of your investment in easy language
Many mutual fund experts consider SIP (Systematic Investment Plan) as a better investment method, especially compared to lump sum investment. You feel a habit of saving from SIP and it gives financial benefits in the future.
Sip Calculator: Why is it beneficial?
Online Sip Calculator is an easy tool, which tells you how much returns you can get after your investment. It has some advantages:
It helps you understand how much money to invest every month.
Gives information about the entire invested amount.
Getting an idea of your possible returns.
How does SIP Calculator work?
SIP Calculator works on an easy formula:
M = p × ({(1 + i)^n – 1} / i) × (1 + i)
Where,
M = amount received on maturity
P = money invested every month
n = total number of months
i = Periodic Interest Rate
Example (Investment of ₹ 2,000):
Suppose you invest ₹ 2,000 every month, for 12 months, and the interest rate is 12%.
Monthly Rate of Return will be: 12%/12 = 0.01
From Formula:
M = 2,000 × ({(1 + 0.01) {12} – 1} / 0.01) × (1 + 0.01)
outcome:
About ₹ 25,619
Return depends on the market
Note that the return of SIP can change according to the market. If the market is up and down, the returns may also increase or decrease.