What is an SIP Calculator?
The Systematic Investment Plan (SIP) Calculator is a free online financial tool on the AssetPlus website that helps you calculate your returns from SIP investments. It allows you to compare the returns from various SIP Investment Strategies.
An SIP Calculator estimates the future value of your SIP investments by considering factors such as the investment amount, expected rate of return, and investment tenure. By entering these details, you can get an idea of how your investments may grow over time. While the actual maturity amount may vary due to external factors, the calculator provides an approximate understanding of the expected returns.
With this information, you can make a more informed decision about which SIP strategy is most viable for you.
How Does an SIP Calculator Work?
Our SIP Calculator Online considers three main factors:
- Amount of the initial investment (P)
- Frequency of the investment (n)
- Expected rate of return (r)
By inputting these values, the calculator determines the final invested amount and the estimated returns at the end of a specific period.
Benefits of Using an SIP Return Calculator
The advantages of using an SIP Return Calculator are numerous, including:
- Estimate required time and rate of return: You can estimate the rate of return required to reach your desired final amount and the time needed for your investment to grow adequately.
- Choose the right SIP: The calculator provides multiple variables to assess an SIP scheme. You can compare multiple schemes and choose the one that suits you best.
How to Use the AssetPlus SIP Calculator
The SIP Calculator on AssetPlus helps in calculating SIP returns on maturity and the SIP Monthly Investment amount based on the target.
To calculate SIP returns on maturity:
- Enter the amount you want to invest.
- Enter the duration of the investment.
- Enter the expected rate of return.
The calculator will instantly display:
- The total value of your investment after the duration.
- The total invested amount.
- The estimated returns from the investment.
To estimate the monthly investment amount:
- Enter the expected target amount.
- Enter the investment duration.
- Enter the expected rate of return.
The calculator will compute the values and show how much you need to invest monthly to reach your investment target.
How Are SIP Investment Returns Calculated?
SIP returns are calculated using the following formula:
A = P [(1 + r/n) ^ nt – 1] / (1 – (1 + r/n) ^ (-1/3))
Where:
- A -> Estimated Returns from the SIP
- P -> Amount you invest in SIP
- r -> Expected rate of return
- n -> Number of total SIPs made
Example of Using SIP Calculator
Suppose you decide to invest ₹5,000 per month in an SIP with an average return of 12% per year for 5 years. By entering these details into the SIP calculator:
- Investment Amount: ₹5,000
- Expected Rate of Return: 12%
- Duration: 5 years
The SIP calculator will show that your final amount will be ₹4,12,431.80 from a total invested amount of ₹3,00,000.
Alternatively, if you aim to buy a car worth ₹5,00,000 in 2 years with an SIP returning 12% annually, the calculator will show that you need to invest ₹18,353 per month to reach your goal.
Advantages of Using the AssetPlus One SIP Calculator
- Enables financial planning: Helps plan your monthly budget by estimating how much you need to invest regularly.
- Compare and assess SIPs: Assists in comparing various SIP strategies based on the final amount, total invested amount, and expected return.
- Free to access: The calculator is free to use anytime, anywhere.
- Provides instant results: Offers accurate, instantaneous results.
- Easy to use: Simple interface requiring only basic SIP details for quick results.
Systematic Investment Plans (SIPs) in India
SIPs are a popular method for building wealth in India, especially among the salaried middle class. They allow you to invest a fixed amount at regular intervals, providing an easy, convenient way to invest without timing the market.
Types of SIPs
- Regular SIPs: Fixed amount invested periodically, averaging out the cost of SIP units.
- Flexible SIP: Adjust the SIP amount as per market conditions and financial situation.
- Step-up SIP: Increase the SIP amount at regular intervals, suitable for those expecting annual increments.
- Perpetual SIP: No end date, continuous investment until you request a stop.
- Trigger SIP: Set triggers based on market conditions to automate investments.
- Multi SIP: Invest in multiple funds via a single SIP, adding diversity to your portfolio.
Benefits of SIPs
SIPs offer numerous benefits, including financial discipline, tax savings, and professional management of investments. They enable regular investments, compounding returns over time, and flexibility to adjust contributions as your financial situation changes.
SIP Vs. Lumpsum
The choice between SIP and lumpsum Investment depends on your cash flow. SIPs are ideal for regular income, while lump sum investments are better for indefinite income intervals, offering higher returns with the same total investment.
Mistakes to Avoid in SIP Investments
Avoid these mistakes in SIP investments:
- Procrastination: Delaying SIP reduces compounding benefits.
- Stopping SIP: Stopping SIP midway loses potential high returns.
- Ill-informed selection: Choose funds based on thorough research.
- Excessive investing: Invest within your means to avoid financial strain.
Invest in Mutual Funds Using SIP Calculator
Use the SIP Calculator to evaluate returns from various mutual fund SIP schemes. Analyse the data to choose the best scheme for you.
AssetPlus SIP Calculator
AssetPlus offers a simplified SIP calculator to help you estimate and map your investment to your financial goals. It is an interactive calculator that provides you with accurate results.
Using the AssetPlus SIP calculator is simpler than making your coffee. Here’s the procedure:
Scroll above to use the calculator and input the following information:
- Investment amount,
- Duration,
- The expected rate of return,
- Annual Increment (in case you wish to step up your SIP anytime during the year)
You will find your results on the right side, including the total amount invested and the growth and final value adjusted with inflation. You can adjust the variables to analyse different investment scenarios and make informed decisions. Using the AssetPlus SIP calculator, you can make informed decisions, appreciate the growth potential of your investments, and evaluate different investment scenarios.