What is a SIP Calculator?
Are you tired of financial uncertainty and musing on if your hard-earned money is working hard enough for you? Well, it is an ordinary issue we all face in our daily grind. We have come up with a solution that will align your monthly savings and the returns on your investments will not seem lacklustre. It is with the SIP Calculator; shortened for Systematic Investment Plan.
It is your pick-me-anytime tool to grow your wealth and the best calculator for financial stability. In this article, we are going to find out the nitty-gritty details of this tool, from how to use the SIP calculator to its benefits. Everything will be covered. So, stick to the article till the end and find out mind-boggling information.
Best Mutual Funds
| Mutual Funds | Expected Returns |
| Kotak Emerging Equity Fund | +28.58% |
| PGIM India Midcap Opportunities Fund | +27.49% |
| Nippon India Small Cap Fund | +38.95% |
| Kotak Small Cap Fund | +31.35% |
| Nippon India Growth Fund | +32.02% |
We don’t recommend these funds. This Only For Educational Purpose
Overview of SIP Calculator (Systematic Investment Plan)
A Systematic Investment Plan is an investment tool that guides you to invest a fixed amount regularly (usually monthly) in mutual funds, trading accounts, or retirement accounts. The key benefit of SIPs lies in their long-term advantages, such as dollar-cost averaging (DCA), without requiring a large initial investment. Shortly, we can say it is a way to secure your payouts in safe hands, turning them into high assets with 2x profit.
This calculator is trained to give you efficient results on your investments based on your mutual funds. But keep in mind the actual amount may vary after being affected by some specific factors. Keep in mind, your investment grows due to both monthly contributions and the power of compound interest. While most SIP plans involve payouts into the same security every month, you can diversify your investments by choosing a range of mutual funds.
How can a SIP return calculator help you?
It is a well-liked tool that assists investors in making informed decisions about their systematic investment plans. Simply, it helps you determine the optimal monthly contribution based on your financial goals, risk tolerance, and investment horizon. So we can say it is an optimal tool to rely on for how much you want to invest regularly.
Another plus of this tool is that it keeps tracking your total investment. Over time you keep contributing and at the end, you have a cumulative investments chart to keep the check and balance.
One of the most valuable features of a SIP calculator is its ability to estimate future returns. By inputting the expected annual rate of return you can see how your investment will grow with passing time.
How do SIP calculators work?
Remember a simple formula
M = P × ({[1 + i]^n – 1} / i) × (1 + i).
Well, when you use a SIP calculator, you will need to provide specific inputs as seen in the above formula. Here is a breakdown:
The fixed amount you plan to invest each month.
The anticipated growth rate of your investment.
The duration for which you intend to continue the SIP.
Each month, your SIP contribution adds to the total investment. The calculator takes into account compounding, which means your investment grows not just from the money you put in, but also from the interest earned on the money that is already there.
Example of a SIP Calculator
Suppose you want to invest ₹1,000 per month for 12 months at a periodic interest rate of 12%. Here is how you can calculate the future value of your investment using the SIP calculator:
Monthly Investment Amount: ₹1,000
Periodic Interest Rate: 12% (expressed as a decimal, so (r = 0.01))
Investment Period: 12 months
[ FV = P \times \left(\frac{{(1 + r)^n – 1}}{r}\right) \times (1 + r) ]
Therefore, your investment of ₹1,000 per month for 12 months at a 12% annual interest rate would grow to approximately ₹12,809.25.
How can you Use the SIP Calculator?
It is just a simple and straightforward process, all you have to do is enter the amounts within a few taps.
Types of SIPs
Below we have mentioned different types of SIP so you can make a decision easily:
Regular SIPs
This is the most common type where you pay fixed payments at regular intervals most likely on a monthly basis. The amount you invest stays the same for a consistent period of time.
Multi SIPs
Multi SIP allows you to invest in multiple funds simultaneously and helps you allocate funds across various schemes.
Trigger SIPs
Trigger SIP adjusts investments based on market triggers like a market dip or a certain index level. The trigger can start the SIP, redeem fund units, or switch schemes, and automate investments based on specific principles.
Perpetual SIPs
It has no fixed tenure and the contributions continue until you request a stop. You can idealize it for long-term wealth creation.
Set-Up SIPs
In this type, your investment amounts gradually increase over time. This will allow you to increase contributions as income grows.
Flexible SIPs
This SIP gives you a margin to adjust contributions as needed, you can increase, decrease, and pause them. If you have irregular income streaming or have changing financial plans then it is a go-to type.
Yearly Breakdown
This table is organized so you can check how power of compounding experience spikes:
| Year | Yearly Investment Amount | Total Investment | Expected Rate of Return | Total Returns |
| 2024 | Rs.60000 | Rs.60000 | 12% | Rs.4047 |
| 2025 | Rs.60000 | Rs.120000 | 12% | Rs.16,216 |
| 2026 | Rs.60000 | Rs.180000 | 12% | Rs.37,538 |
| 2027 | Rs.60000 | Rs.240000 | 12% | Rs.69,174 |
| 2028 | Rs.60000 | Rs.300000 | 12% | Rs.1,12,432 |
| 2029 | Rs.60000 | Rs.360000 | 12% | Rs.1,68,785 |
| 2030 | Rs.60000 | Rs.420000 | 12% | Rs.2,39,895 |
| 2031 | Rs.60000 | Rs.480000 | 12% | Rs.3,27,633 |
| 2032 | Rs.60000 | Rs.540000 | 12% | Rs.4,34,108 |
| 2033 | Rs.60000 | Rs.600000 | 12% | Rs.5,61,695 |
Pros of Using Systematic Investment Plan Calculator
Though we all have come to know how important this tool is for removing financial uncertainties from your life. Below is a detailed elaboration of the bright sides of this app:
Accurate Planning
An SIP calculator allows precise financial planning by inputting your investment amount, duration, and expected returns, it gives you room to find out your future wealth total. Accurate planning helps align your SIP with specific goals you want to achieve in life.
Comparison of Several Scenarios
With access to this calculator you can enable scenario analysis. It will then help you compare different investment amounts, durations, or return rates. All these understandings help you make better decisions and optimize your SIP strategy.
Visualization of Potential Returns
Seeing projected returns graphically motivates investors so the calculator displays how your money compounds over time. It also reinforces the power of consistent contributions and compounding effects.
Goal Setting and Progress Monitoring
SIPs are goal-oriented, whether it is building an emergency fund or funding a dream vacation, set clear objectives. You can monitor progress regularly using the calculator.
User-Friendly SIP Calculator
Our SIP calculators have a slick and easy-to-use interface. You don’t need financial expertise to continue it because the user-friendly interface simplifies complex calculations, and makes financial planning accessible to all.
Mistakes to Avoid in a Systematic Investment Plan
There are certain mistakes you need to avoid while using the SIP calculator, some are below:
Procrastination
Time is a critical factor in compounding so avoid delaying the start of your SIP. The earlier you begin, the more time your investments have to grow.
Stopping SIP
Using SIP immaturely and discontinuing the calculator can lead to potential consequences. If you don’t show consistency and disrupt the compounding process it will lead to missed long-term gains.
Informed selection of funds
Choosing funds without proper research will ultimately affect the stats. Ignoring factors like fund performance, risk profile, and expense ratios can lead to suboptimal results.
Excessive investing
Overcommitting to SIPs beyond your financial capacity can lead to stress and financial instability.
FAQs
Wrapping Up
Try today the new SIP calculator (Systematic Investment Plan) for accurate planning and making scenario comparisons. There are many benefits of using it like you can visualize potential returns. So, don’t settle for less, and turn yourself into a more advanced business tycoon today.