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SIP
CALCULATOR

A SIP (Systematic Investment Plan) is a smart way to invest in mutual funds by contributing a fixed amount regularly. It helps in rupee cost averaging and compounding, reducing market risk over time. SIPs are flexible, allowing investors to start with small amounts and increase contributions as needed. They are ideal for long-term wealth creation and financial goals like retirement or education. Use our SIP calculator to estimate your returns and grow your investments efficiently!

Investment Amount
(₹)

Invested Amount

Estimated Returns

₹6,00,000

₹1,80,824

Interest Rate
(%)

Future Value

₹7,80,824

Investment Duration
(yrs)

Year
Invested Amount
Estimated Returns
Total Value
1
₹1,20,000
₹6,703
₹1,26,703
2
₹2,40,000
₹26,673
₹2,66,673
3
₹3,60,000
₹61,300
₹4,21,300
4
₹4,80,000
₹1,12,118
₹5,92,118
5
₹6,00,000
₹1,80,824
₹7,80,824

How to use SIP Calculator?

Enter Investment Amount:  

  • Start by entering the amount you plan to invest regularly each month (e.g., ₹5,000). This is the amount that will be contributed every month to your SIP.

Set Interest Rate:

  • Next, input the expected annual return rate (e.g., 8%). This represents the expected percentage return on your investment each year, which will help your money grow over time.

Choose Time Period:

  • Select the number of years you want to invest (e.g., 10 years). The longer the time period, the more potential your investment has to grow, thanks to the power of compounding.

View Results:

Once you’ve entered the investment amount, interest rate, and time period, the calculator will show the following results:

  • Invested Amount: The total money you’ll contribute over the entire investment period.

  • Estimated Returns: The returns you expect to earn based on your monthly investment and the expected annual return rate.

  • Future Value: The total value of your investment after the set number of years, including both your contributions and the returns earned.

​How does the SIP calculator work?

The SIP (Systematic Investment Plan) calculator is a tool that helps you estimate the future value of your monthly investments. It works by taking three key inputs from you:

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  1. Monthly Investment: This is the amount you plan to invest regularly, such as ₹5,000 every month.

  2. Expected Rate of Return: The annual return rate you expect from the mutual fund or investment, such as 10% per year.

  3. Investment Period: The time period for which you plan to invest, typically in months or years.

 

Once you enter these details, the SIP calculator uses a formula to calculate how your monthly investments will grow over time. It factors in compound interest, which means that the returns you earn will also earn returns in the future, resulting in a "snowball effect" for your investment. The calculator then provides an estimate of the future value of your SIP, showing you the total value of your investments at the end of the chosen period, including both your contributions and the returns generated.

What is the benefit of using an SIP calculator?

The SIP calculator provides several significant benefits that help you make more informed decisions about your investments:

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  1. Helps Set Investment Goals: The calculator allows you to determine how much you need to invest regularly to reach a specific financial goal, such as saving for a house, education, or retirement. This can motivate you to stay committed to your investment plan.

  2. Estimates Future Returns: It gives you a realistic estimate of the future value of your investments based on different return rates and investment periods. This helps you understand how your money will grow over time, enabling you to adjust your contributions or investment strategies to meet your goals.

  3. Shows the Power of Compounding: By using the SIP calculator, you can clearly see how compounding works. Regular investments over time can generate substantial returns, even if the monthly contribution is small. The calculator helps visualize how reinvested returns add up to larger gains in the future.

  4. Increases Financial Awareness: The tool makes it easier for individuals to understand the impact of their investment decisions. By adjusting variables like the monthly investment amount or the expected return rate, you can instantly see how different factors affect the growth of your investment.

Can I calculate the future value of my SIP investments?

Yes, an SIP calculator is specifically designed to calculate the future value of your SIP investments. The future value refers to the total amount you will accumulate after a certain period of time, considering both your monthly contributions and the returns earned on them.

​

To calculate the future value, the SIP calculator considers the following:

​

  • Total Contributions: This is the total amount you will invest over the investment period. For example, if you invest ₹5,000 every month for 5 years, your total contribution would be ₹5,000 x 60 (months), which equals ₹3,00,000.

  • Returns: The calculator also estimates the returns generated from your contributions based on the expected annual return rate. These returns compound over time, increasing the value of your SIP.

  • Compounding: The calculator accounts for the power of compounding, where the returns earned from previous months are reinvested and earn returns themselves, leading to exponential growth.

 

Once you input the monthly contribution, rate of return, and time period, the calculator will give you an estimate of the future value, allowing you to understand how much you will accumulate by the end of your SIP term.

How can I adjust my SIP for monthly or lump sum investments?

An SIP calculator is flexible enough to accommodate both monthly SIP investments and lump sum investments. Here’s how you can adjust the calculator for each type:

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  1. Monthly SIP Investment:

    • This is the default option for SIP calculators. You input the amount you wish to invest every month, such as ₹5,000, ₹10,000, or any other amount.

    • The calculator calculates the future value based on the regular monthly contributions, the expected rate of return, and the duration of the investment period.

    • This approach is useful for those who prefer regular contributions over time and want to benefit from the power of compounding.

  2. Lump Sum Investment:

    • For a lump sum investment, you invest a large amount of money all at once instead of regular monthly contributions. For example, you might invest ₹1,00,000 in a mutual fund at once instead of ₹5,000 every month.

    • The SIP calculator allows you to switch to a lump sum investment option, where you only input the one-time contribution amount, expected return rate, and investment period.

    • The future value of a lump sum investment is calculated based on the same principles of compounding, but without the monthly contributions.

 

Some SIP calculators may offer a toggle or dropdown menu where you can choose between monthly SIP or lump sum investment options, allowing you to calculate the potential growth of both types of investments.

Is it possible to see a breakdown of my SIP investment over time?

Yes, many SIP calculators offer a detailed breakdown of your SIP investment over time. This breakdown helps you understand how your investment grows and how much of your return comes from your contributions versus the returns generated by compounding. Here’s what you can typically expect in the breakdown:

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  1. Total Contribution: The calculator will show how much you have invested in total over time. For example, if you invest ₹5,000 every month for 5 years, it will display the total amount you have contributed.

  2. Interest/Returns Earned: The calculator will also show how much you earned from the returns. This is the portion of the future value that comes from the investment’s returns, rather than just your monthly contributions.

  3. Overall Value: The final value at the end of the investment period will show both your contributions and the returns earned, providing a clear picture of how your SIP has grown.

  4. Annual or Monthly Summary: Some calculators even offer a yearly or monthly summary, where you can see how much your SIP grows every year or month. This is particularly useful for understanding how your money compounds over time.

 

This breakdown helps you track the growth of your SIP and gives you a clearer picture of how different factors, such as the rate of return and the duration of investment, impact your wealth.

​How does compounding affect the returns in an SIP investment?

Compounding is one of the most important factors that influence the returns of an SIP investment. It refers to the process where the interest (or returns) earned on an investment is reinvested, and it begins to generate additional returns. Here's how compounding works in SIP:

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  1. Reinvested Returns: Each time you make a monthly contribution to your SIP, the returns earned from previous months are added to your principal, so the next month’s returns are calculated based on the new, larger total. This leads to exponential growth over time.

  2. Long-Term Growth: The longer you stay invested, the more pronounced the compounding effect becomes. In the earlier years, most of your SIP value will come from your contributions, but as time progresses, a larger portion of the total value will come from the returns, compounding and increasing your wealth.

  3. The Power of Time: Compounding’s true potential is unlocked over time. Even with small monthly investments, the longer you stay invested, the more you benefit from compounding. For example, investing ₹5,000 every month for 20 years can yield significantly higher returns than investing ₹5,000 for just 5 years due to the compounded growth over a longer period.

 

In summary, compounding enhances the returns on your SIP by continuously reinvesting the returns into your principal, allowing your wealth to grow faster over time.

Plan your future smartly with our SIP Calculator ! Start investing today and grow your wealth

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