Index Fund SIP Calculator

What are Index Funds SIPs?

Index Funds SIPs combine the power of two investment strategies: Index Funds and Systematic Investment Plans (SIPs). Index Funds SIPs leverage the benefits of both strategies. You invest in a diversified basket of stocks (Index Fund) through regular contributions (SIP). This approach is ideal for long-term wealth creation, as it fosters discipline, minimizes investment costs, and captures market growth over time.

Benefits of Index Funds SIPs:

• Long-term wealth creation: Focuses on consistent growth over market cycles.

• Diversification: Reduces risk by spreading your investment across various stocks.

• Convenience and affordability: Easy to start and requires minimal investment amounts.

What is the Index Fund Calculator?

An Index fund SIP Calculator is an online tool that can calculate the returns on investment. It helps investors predict their potential returns when investing in index funds.

The SIP index fund calculator gives a clear idea to the investor about the performance of a scheme based on an offered rate of interest. In addition, an investor may draw several comparisons among different SIP funds using the SIP index fund calculator.

How can an Index Fund SIP Calculator Help an Investor?

The index fund calculator shows the power of compounding by generating more returns on premium amounts. Here are some benefits that an investor may enjoy using an index fund SIP calculator.

1. Goal Planning

   Investors can use the calculator to plan for specific financial goals, such as buying a house, funding education, or building a retirement corpus. By inputting the target amount and time horizon, investors can determine the required monthly SIP amount to meet their goals.

2. Determination of Amount

   An investor using an index fund calculator may determine the amount required to invest to accumulate the desired corpus.

3. Time Period

   By entering the expected interest rate and premium amount, an individual may decide the time period he is required to stay invested with the SIP investment.

4. Convenience

   It is straightforward to use the index fund SIP calculator. An investor may quickly calculate the returns by visiting the SIP calculator website.

5. Comparison with Other Investment Options

   Investors can use the index fund calculator to compare the potential returns of index fund SIPs with other investment options.

Formula For Index Fund Calculation

The Index Fund calculator uses the following formula to calculate returns on your Index Fund SIP investment: 

How to Use Policybazaar’s Nifty 50 Index Fund Calculator?

It is easy to use the index fund SIP calculator. One needs to follow the steps listed below in order to calculate the SIP returns:

Step 1: Visit the Index fund Calculator on Policybazaar's website

Step 2: Provide the required details, such as investment amount, tenure of investment, expected rate of return, and the number of years you want to stay invested for

Step 3: View the results, including the total investment made and the SIP maturity amount. You can also check out various investment plans available for you.

Let us understand it with an example:

If an investor commits to saving ₹10,000 monthly through SIP and utilizes the SIP index fund calculator with an assumed 12% average interest rate over 10 years, they could accumulate around ₹46,46,782. During this period, the total invested amount is ₹24,00,000, resulting in interest earnings of ₹22,46,782.

Conclusion

The index fund SIP calculator is a helpful tool to calculate the returns one may get in a long-run investment. In addition, it helps the investor in order to make comparisons among different SIP plans. On the basis of the previous year's performance of a scheme, an investor may conclude the rate of interest and determine the returns using an index fund SIP calculator.