SIP Calculator

What is an SIP Calculator?

Example of Using a Mutual Fund SIP Calculator 

If you're 25 years old and plan to invest ₹10,000 per month for 30 years, with an expected return of 12%*, a mutual fund SIP calculator shows that you could potentially accumulate at least ₹3.08 crore after 30 years.

This information can help you select a mutual fund or a market-linked fund scheme with historical performance that aligns with your desired return, which will help in retirement planning accordingly.

In scenarios where you have a fixed monthly investment in mind, using a mutual fund SIP calculator is important for planning your investments effectively.

*The estimated rate of return is a guideline and actual results may vary. Adjust the rate based on your risk tolerance and financial goals. For personalized advice, consult with a qualified financial advisor.

Understanding the Mutual Fund SIP Calculator Formula 

The SIP mutual fund calculator works on the basis of the following formula:

How Does the Mutual Fund SIP Calculator Work?

Rohit, a young professional, wants to invest ₹10,000 monthly for 30 years at a 12% interest rate. The monthly interest rate is calculated as 12% / 12 = 1% or 0.01 in decimal.

Where:

• P is the monthly investment amount (₹10,000)

• r is the periodic interest rate (12% per year, compounded monthly, so 12%/12 = 1% per month or 0.01)

• n is the total number of payments (30 years * 12 months/year = 360 months)

Calculation:

Future Value = 10000 * (((1 + 0.01)^360 - 1) / 0.01) * (1 + 0.01)

You'll find:

Future Value ≈ ₹3.08 Cr.

Therefore, Rohit's investment of ₹10,000 per month for 30 years at a 12% annual interest rate will grow to approximately ₹3.08 Cr. 

**The interest rate on an SIP will vary as per the market situation. It may decrease or increase and can change the returns estimated.

What Details are Required to Use an SIP Calculator Online?

To use Policybazaar’s SIP calculator online, you need to provide the following key details:

• Monthly investment amount (how much you want to invest via SIP each month)

• Investment duration (how many years you plan to invest for)

• Expected annual return rate (the estimated percentage return per year)

Alternatively, if you have a future savings goal, you can enter:

• Goal amount (the total amount you wish to accumulate)

• Investment duration (years)

• Expected annual return rate

With these inputs, the calculator will compute either the potential maturity amount (if you enter a monthly SIP) or the required monthly SIP (if you enter your goal).

How to Use Policybazaar’s Mutual Fund SIP Calculator?

Here are the steps you can follow to use Policybazaar’s SIP mutual fund calculator above:

1. If You Know Your Investment Amount:

   You can calculate monthly, yearly, or lump sum returns on your investments by following the steps below:

   1. Monthly Return Calculation

      • Specify the amount you plan to invest each month.

      • Enter your anticipated annual return rate.

      • Indicate the duration of your investment in years.

      The mutual fund SIP calculator will display the total accumulated amount at the end of your investment period.

   2. Yearly Return Calculation

      • Yearly Investment Amount.

      • Expected Annual Return.

      • Investment Horizon

      The mutual fund calculator will display your estimated yearly returns and the total accumulated amount.

   3. Lump Sum Return Calculation

      • Specify the one-time amount you plan to invest.

      • Enter your anticipated annual return rate.

      • Indicate the duration of your investment in years.

      The calculator will display your estimated lump sum returns and the total accumulated amount at the end of your investment period.

2. If You Know Your Goal Amount:

   • Enter the amount you aim to save or you want to generate through your investments.

   • Specify the time period you plan to invest for.

   • Input the expected rate of return on your investment.

   • The SIP calculator will display real-time results of the monthly investment, the total investment you have to make, and the wealth you will gain from that.

How Can an SIP Return Calculator Help You?

A SIP (Systematic Investment Plan) return calculator helps you estimate the potential returns from your mutual fund SIP investments over a selected time frame, based on your input amount, duration, and assumed rate of return. This tool is widely used by both beginners and experienced investors for the following key purposes:

• Estimates maturity amount to help set financial goals.

• Compares different SIP scenarios by adjusting key variables.

• Simplifies planning by automating calculations.

• Supports informed decisions with projected returns.

Types of SIP Calculators

Systematic Investment Plan (SIP) calculators come in various forms to help investors plan their investments better. Below are the key types of SIP calculators and their specific uses:

1. Basic SIP Calculator

   Calculates the future value of your SIP investments based on investment amount, tenure, and expected return. Ideal for beginners.

2. Step-Up SIP Calculator

   Helps you estimate returns when you increase your SIP amount annually. Useful for those whose income grows over time.

3. SIP with Inflation Adjustment Calculator

   Adjusts your investment returns for inflation to show the real value of your corpus. Helps assess true purchasing power.

4. SIP Goal Planner / Target SIP Calculator

   Determines the monthly SIP amount needed to achieve a specific financial goal within a chosen timeframe.

5. SIP Delay Cost Calculator

   Shows how delaying your SIP by months or years can reduce your final corpus. Encourages early investing.

6. One-Time vs SIP Comparison Calculator

   Compares lump sum investing with monthly SIPs to help you understand which strategy suits your financial goals better.

7. SIP Tax Benefit Calculator (ELSS SIP)

   Estimates the tax savings you can enjoy by investing in Equity Linked Savings Schemes (ELSS) through SIP under Section 80C.

8. SIP Return Calculator (XIRR-Based)

   Calculates the actual return of your SIP investments using the Extended Internal Rate of Return (XIRR) method. Best for tracking irregular investments.

9. SIP Break-Even Calculator

   Finds the point at which your returns surpass your total investment, helping you decide when to stay invested or exit.

10. SIP Tenure Calculator

    Tells you how long you need to continue your SIP to reach a desired corpus based on fixed investment and return assumptions.

The Use of an SIP Calculator in Financial Planning 

With a mutual fund SIP calculator, you can make your investment decisions more insights-driven. These tools make you a better investor by offering multiple benefits, including - 

1. Strategic Financial Planning:

   The mutual fund SIP calculator acts as a strategic financial planning tool. It offers a clear and realistic projection of your investment's growth over time. 

2. Investment Goal Setting:

   Aligning your investments with specific financial goals is crucial for success. Whether you're saving for education, a new home, or building a retirement corpus, the mutual fund return SIP calculator becomes an important tool. It assists in calculating the required investment amount and the time it will take to achieve your defined objectives.

3. Scenario Analysis:

   The monthly SIP investment plan calculator enables you to conduct scenario analyses. You have the flexibility to adjust variables such as investment amount, duration, and expected returns.

4. Risk Assessment:

   Assessing the risk associated with investments is a critical aspect of financial planning. The SIP mutual fund calculator facilitates this by considering factors such as expected returns and investment duration. This aids in gaining a comprehensive understanding of the potential risks and rewards associated with different investment plans and options.

Key Takeaways

SIP mutual fund calculators have become an essential tool for today's digitally savvy investors like you. If you want to invest in different funds through SIPs, using the SIP calculator mutual fund is a must for making realistic decisions. With our best mutual fund SIP calculator, you can estimate potential returns and choose the best SIP plans that best suit your needs.