SIP Calculator

A SIP calculator is a useful financial planning tool designed to help you estimate the potential returns from your systematic investment plan in mutual funds or other financial instruments like stocks. It takes into account a host of factors like the investment amount, frequency, expected rate of return, and investment duration, to provide a projection of the returns that your SIP is likely to generate by the end of its tenure.

In addition to the estimated returns, the SIP plan calculator also displays the principal investment amount and the total future value of your investment. A SIP calculator is an invaluable tool for financial planning. You can use it to set realistic goals and adjust your investment strategies based on the predicted outcome.

A SIP calculator operates on a simple yet effective principle. It inputs the parameters you provide into a specific mathematical formula to project the growth of your investments over time. The formula that a typical SIP return calculator uses is as follows:

M = A × {[(1 + R)^T − 1] ÷ R } × (1 + R)

• - M represents the estimated amount you will receive at the end of the SIP tenure.
• - A represents the amount you plan to invest in the SIP each month
• - R represents the rate of return you expect your investment to deliver per month
• - T represents the number of SIP investments you plan to make during the entire tenure

Note: The SIP investment plan calculator assumes a constant rate of return to estimate returns. This may not accurately reflect real-world performance since markets tend to fluctuate frequently. However, it can be used to get an estimate of the returns, which can be used to plan your investments.

A SIP investment returns calculator can be beneficial for you in more ways than one. Here is a quick overview of some of the many ways in which the tool can help you.

• A SIP calculator helps you estimate the returns your investment is likely to generate and its future value at the end of the tenure.
• The tool can also enable you to determine just how much you need to invest regularly to achieve specific financial goals.
• By adjusting the variables in a SIP calculator, you can see how different investment amounts or durations affect your returns.
• With a SIP calculator, you can construct different investment scenarios and compare them with one another to make informed investment decisions that are in line with your financial objectives.
• A systematic investment plan calculator visually demonstrates the impact of compounding over time. Seeing potential future returns can motivate you to start investing early and consistently.

The systematic investment plan calculator available on the Research 360 platform is user-friendly and simple to use. All you need to do is follow the steps outlined below.

• Step 1: Enter the amount that you plan to invest each month in a SIP.
• Step 2: Enter the rate of return (per annum) you expect to receive from your investment.
• Step 3: Enter the number of years you plan to invest in the SIP.

Once you specify these details, the Research 360 SIP calculator will instantly display the estimated returns from your investment, along with the principal amount and the total future value.

Here is a hypothetical example to help you understand how the returns from a systematic investment plan are calculated.

Assume you plan to invest Rs. 5,000 per month in a mutual fund SIP for a tenure of 10 years. The expected rate of return is 10% per annum. This translates to a return of 0.83% per month. By substituting these values in the above-mentioned mathematical formula, you can get the estimated amount you will receive at the end of the tenure.

M = Rs. 5,000 × [ {(1 + 0.0083)¹²⁰ — 1} ÷ 0.0083 ] × (1 + 0.0083) = Rs. 10,32,760

If the total future value of your investment is Rs. 10,32,760, then the returns would be Rs. 4,32,760 [Rs. 10,32,760 - (Rs. 5,000 x 120 months)].

A systematic investment plan calculator has several benefits. Let us explore some of the key advantages of using the tool.

• Instant Results: A SIP plan calculator is fast and displays the results as soon as you enter the values in the respective fields, helping you save time and effort.
• Accurate Calculations: Although you can estimate the returns from your SIP investment manually, the results may not always be completely accurate. By using a SIP investment plan calculator, you can ensure that your results are always accurate and free from mistakes.
• Financial Planning: You can use the future return projections that a SIP investment return calculator provides to set clear, achievable financial goals aligned with your current investment capacity.
• Risk Assessment: With a mutual fund SIP calculator, you can assess potential outcomes in different market scenarios by adjusting return rates. This can help you understand and prepare yourself for various investment risks.
• Educational Tool: A SIP calculator can serve as a useful educational tool to help new investors understand and grasp the concept of investing via a systematic investment plan.
• Cost-Effective: SIP investment plan calculators are completely free to use, making them a cost-effective way to plan your financial investments.