SIP Calculator - Systematic Investment Plan Calculator
Adopting a Systematic Investment Plan, also known as an SIP, is one of the best ways to invest in the stock market. In an SIP, you make consistent monthly investments in an asset class of your choice over a period, thereby inculcating financial discipline. That’s not all. Thanks to rupee cost averaging, an SIP protects you from market downsides to a certain extent, and helps you create wealth over the long term.
But then, is it possible to determine the returns your SIP investments are likely to generate? If that’s what you’re wondering, you can use an SIP return calculator to get an estimate of your investment returns.
What is an SIP calculator?
A Systematic Investment Plan calculator is a free online tool that is designed to determine the amount of returns that your SIP investment is likely to generate in the future. By giving you a fair idea of the returns, this online tool helps you plan your investments in advance. With the SIP investment calculator, you can also find out just how much you would have to invest each month to reach your financial goals.
How does an SIP calculator work?
An SIP return calculator requires you to input certain details of your investment such as -
The amount of monthly investment
that you wish to make
The tenure of the SIP
The expected annual rate of return
The expected annual rate
The tool then uses a simple mathematical formula to determine the amount of returns that you can expect at the end of the specified tenure.
for 5 Years
Let us understand this with an example. Say, you start a SIP of ₹25,000 in a mutual fund generating a compounded annual growth rate (CAGR) of 12% for a period of 5 years. In this case, the future value of your SIP will be ₹20,62,159. Calculate the future value of your SIP using m.Stock’s SIP Calculator now.
That said, here’s something that you need to note. The rate of return in an SIP is completely dependent on the movement of the market. And since the market movement cannot be predicted, the rate of return can vary on either side, which can lead to a difference in the expected return and the actual return that you receive at the end of the tenure.
Benefits of using the m.Stock SIP online calculator
The Systematic Investment Plan calculator from m.Stock offers a host of different benefits to its user. Let’s check out a few of the most important ones
An Estimate of the Return
The SIP calculator from m.Stock gives you a fair idea of the returns your SIP investments are likely to generate.
Ease of Use
It is very easy to use an SIP calculator online. The tool has a simple user interface and you only need to enter the values required. Thereafter, the tool does the rest of the job.
If you’re unsure of how much to invest in an asset through SIP to achieve your financial goals, the m.Stock SIP return calculator can help you easily determine the tenure and the amount of investment that you need to make.
Although it is possible to calculate the returns from an SIP investment manually using a mathematical formula, there’s always the possibility of a calculation error or a mistake creeping in. However, with the m.Stock SIP investment calculator, you get accurate results that are error-free.
The tool takes only a few seconds to generate results, thereby helping you save time and effort.
FAQs on SIP Calculator
Most Systematic Investment Plans allow you to invest amounts as small as ₹500 each month. There’s no maximum limit to the amount of investment that you can make in an SIP.
With an SIP, there’s no maximum limit to the tenure that you can opt for. You can choose to invest for as long as you need to.
No. A Systematic Investment Plan is simply a style of investment, whereas mutual funds are financial products that you can invest in.
You cannot modify the SIP amount in all plans. Only some kinds of SIPs, like flexible SIPs and step-up SIPs, allow you to modify or increase your investment amount respectively.
Generally, mutual funds are the most preferred asset class to invest via an SIP. However, you can use an SIP to invest in individual stocks as well.
Some of the many types of SIPs include regular SIP, flexible SIP, perpetual SIP, step-up SIP, and trigger SIP.
You don’t have to pay any fees or charges for using an SIP return calculator online. In fact, it is completely free for use.