SIP or Systematic Investment Plan is one of the methods of disciplined investment in market-linked funds to grow wealth. SIP Calculator is an online free tool that helps in the easy computation of returns that the investor will receive at the end of the tenure.
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Systematic Investment Plans have achieved great popularity amongst the masses over the past few years because of their great returns, easy accessibility, and hassle-free investments. The Systematic Investment Plan (SIP) Calculator is a financial tool that helps calculate SIP returns based on few investment details. With the help of the online SIP Calculator, investors can clearly understand how many investments they have to make to achieve their desired financial targets. Due to various factors related to the financial market, actual returns may vary from the calculated amount.
There are 4 types of SIPs broadly available in the market these days:
Flexible SIPs, as the name says, allow the investor flexibility in investment amounts. The amount deposited in the Flexible SIP can be decreased or increased as per the investors’ financial condition.
Perpetual way of investing means investing without a mandatory end date. Generally, SIPs come with an end term, that is, 1 year, 3 years, or 5 years, but in perpetual SIP, there is no such end date, making the investment more convenient.
Trigger SIPs work for investors who are well aware of the market movements. Working just like shares, these SIPs can be bought and sold at any time, depending on the market conditions. The start date, date of redemption, or switch date can be set once the event occurs.
Top-up SIP helps make investments periodically in which an investor can increase the deposit amount when they have higher income available. This brings out the best results for an investor while making investments.
SIP is considered a better investment option for investment in market-linked funds offered by Insurance companies and Fund houses because:
It inculcates a habit of regular savings.
One can deposit money at regular intervals without being overburdened to pay all the amount in one go.
Pocket-friendly deposits can be made monthly, keeping availability in mind.
Systematic Investment Plan (SIP) Return Calculator is a beneficial tool in the following ways:
Even though it is known that the financial market is volatile and keeps on fluctuating from time to time, returns calculated on the online SIP calculator may vary from the actual returns. Still, SIP return calculator provides close enough results to help investors invest more confidently.
It is very easy to use the SIP return calculator. All an investor has to do is put in the basic details on the SIP calculator, like monthly invested amount, expected rate of return, the tenure of investment, and maturity value will be calculated within a blink of an eye.
As the online SIP Calculator is an easy-to-handle tool, hence it is considered one of the best tools for investment calculation and planning financial goals accordingly. With minimum details required, SIP return calculator provides accurate results helping first-time investors invest freely.
The Systematic Investment Plan tool is easy to use and hassle-free, with minimal complications involved. The following information needs to be entered into the online SIP calculator to compute the maturity amount:
The monthly amount that the investor wishes to invest
The current rate of return offered on the particular mutual fund
Total tenure the investor wishes to invest for
The maturity value will be computed in seconds
The following formula is used for the computation of maturity value received at the end of SIP investment tenure:
FV = P x ({[ 1+ i ] ^ n-1 } / i ) x (1+i) |
Here: |
FV = Future Value (The amount to be received after maturity) |
P = amount that the investor invests |
i = The rate of interest periodically, that is, annual return rate percentage / 12 |
n = Total number of months |
Example
Mr. Karan invests Rs. 5,000 monthly at 14% through ELSS Fund SIP. If he selects the tenure of 10 years, then the returns will be:
FV = 5,000 x ({[ 1 + 0.14] ^ 120 – 1} / 0.14) x (1 + 0.14) |
FV = Rs. 13,10,000 |
Total returns = Future Value – Invested Amount throughout the tenure |
Total returns = Rs. 13,10,000 – Rs. 6,00,000 |
Total returns = Rs. 7,10,000 |
Listed below are some of the key advantages of using the SIP online calculator:
Using the SIP return calculator will offer peace of mind and helps in saving investors precious time.
The calculations done on the online SIP calculator will offer instant results, which will help the investor plan for future finances.
The SIP online calculator can be used from any point globally. The use of this calculator has made the calculations easy.