SIP Calculator

What is SIP?

SIP, or Systematic Investment Plan, is a popular, widely preferred investment approach for fixed, regular investments in mutual fund schemes. The SIP system adheres to the rupee cost averaging theory, giving investors minimal shares at high prices and maximum at low prices. Till now, it is one of the most disciplinary investment approaches.

What is an SIP Calculator?

One simple tool that users can use to estimate returns on their SIP investments in mutual funds is a SIP calculator. These days, it is one of the popular investment options for millennials.

There are multiple mutual fund sip calculators available to assist potential investors in estimating their investments. Real returns, however, differ depending on a number of variables in a mutual fund scheme. The SIP calculator fails to provide an explanation for the exit load and expense ratio (if any).

How To Use IIFL SIP Calculator?

Anyone can use the IIFL SIP return calculator in a few simple steps:

• Step 1 : Enter the amount of money you invest in your SIP scheme every month.
• Step 2 : Go to the empty tenure field and input the number of years for which you want to make the investment.
• Step 3 : Finally, enter the estimated return rate of your SIP scheme and click on compute.

Now that you know how to calculate SIP returns, let’s quickly examine its advantages.

How do SIP calculators work?

Even though you can always locate a SIP calculator online it’s still a good idea to understand how these figures are calculated so you can feel more secure about your investing strategy. Compound interest is a mathematical formula that SIP calculators use to calculate investment returns. The calculator evaluates the returns while taking compounding frequency into account. The SIP calculator also asks users to enter the period of their investment, the estimated rate of return, and the monthly investment amount that they wish to make.

M = P x {[(1+ r)^n – 1] / r } x (1+r)

M is the amount you receive upon maturity
P is the Principal Amount you invest at regular intervals
n is the number of payments you make
r is the expected rate of return
Consider the scenario where you desire to invest Rs1,000 each month for 2 years at an interest rate of 12%.

Therefore, the monthly rate of return comes out to be 12%/12 = 1% = 0.01

Using the above formula in our scenario, we can calculate the maturity value.

Maturity Value = 1,000X ({[1 +0.01] ^ {24} – 1} / 0.01) x (1 + 0.01) = Rs 27,243

If we would have just saved that amount in cash, we would have had Rs 24,000. Hence by investing in a SIP we got an added return of Rs 3,243 over a period of 2 years.

How can a SIP return calculator help you?

You can use the SIP calculator to determine the predicted returns and wealth growth for your monthly SIP investment. Based on an anticipated annual return rate, you can obtain a rough estimate of the maturity amount for any monthly SIP.

Some mutual fund experts claim that SIP can yield greater returns than lump-sum investments. You can develop financial discipline and the habit of setting aside money for the future with the help of SIP investments.

Here are the benefits of using a Mutual Fund SIP Calculator:

1. Calculators for SIP are very simple to use and navigate. To estimate one’s returns, one must input the necessary information. The calculator also spares investors the time of performing difficult computations. The calculator provides instant estimates for both the maturity amount and the monthly investment amount.
2. Investors can estimate their potential returns at the end of the investment period with the use of the SIP calculator. Knowing how much the investor hopes to make at the end of their investment period aids in determining the monthly investment amount.
3. Both graphical and tabular representations of the return estimations are provided by the calculator. This makes it simple for investors to understand the returns and make defensible selections.
4. We go far beyond other calculators, which just show you the minimum monthly commitment amount or the estimated future worth of your investments. In keeping with our promise to give you access to this tool, we also give you a list of funds that could be able to assist you in achieving your financial objectives.

Advantages of Using a Systematic Investment Plan Calculator

• The Mutual Fund SIP calculator from IIFL is easy to use and quick to navigate. Simply input details like tenure, amount, and return rate, and you’re done.
• Use the SIP Calculator online to estimate how much you need to save to attain your investing goal with no or minimal hassle.
• A monthly SIP calculator always considers the real-time value of stocks to provide you with an idea of accurate returns after calculating the projected growth of products from previous performances.
• A SIP calculator allows you to begin your investment journey even when you have lower funds. After gaining returns from the SIP investments, you can always go ahead with larger investments.
• A monthly SIP calculator offers instant results accurately and eliminates the need for manual calculation, which is time-consuming and error-prone.
• The IIFL SIP calculator is a free tool, and you can use it an unlimited number of times.

Types of SIPs

There are four most commonly types of SIPs in the market. These include:

• Equity SIP : It enables investors to purchase a prespecified number of shares over a particular period. Equity SIP lets you take advantage of the unpredictable stock market with a disciplined approach.
• Debt SIP : An SIP in debt funds allows you to invest small amounts into mutual funds to establish a corpus as per your investment horizon. You should go for SIPs in debt funds when your time horizon is long.
• Hybrid SIP : It enables investors to regularly invest in hybrid mutual funds. These hybrid funds are a combination of multiple asset classes.
• ELSS SIP : Financial experts recommend investing in ELSS SIP schemes throughout the year. It helps in reducing the negative implications of market volatility.
• Gold SIP : A gold fund SIP enables individuals to make smaller and more manageable gold investments at regular intervals. If you take the SIP route, you will notice the gold price starting to average out.
• Sectoral SIP : A sectoral SIP lets you invest in multiple sectors of the economy at regular intervals. For instance, you can invest in a natural resource, real estate, or utility funds through the SIP route.

What is SIP investment based on the target?

Within a few clicks, you can utilize the IIFL Capital Services SIP amount calculator online. The following information must be entered using this method to calculate the monthly investment amount:

• Type in the anticipated goal amount.
• Indicate the anticipated growth rate.
• Type the length of the investment in years.
• Enter the step-up percentage last.

Step Up is an annual increase in the investment amount that corresponds to the growth in the investor’s income. In other words, investors are allowed to ratchet up their SIP investments by a certain percentage each year.

This makes it easier to reach financial objectives quickly and methodically. Generally speaking, the step-up percentage should match the increase in the employee’s yearly salary.

How to invest in SIP?

Here are 5 easy steps for you to follow if you want to invest in SIP but are unsure how to do so:

You only need a few documents to open a SIP, here they are:

• PAN card
• Address proof
• Chequebook
• Passport-size photo

The steps to invest in SIP are as follows:

• You can submit a copy of your driver’s licence, utility bill, or bank statement as verification of your address.
• Your AADHAR Number is not required, however, having it on hand will make things go more smoothly. Now that you have these documents, you can process your SIP account online. You must supply specific information, like your Name, Date of Birth, Address, and Mobile Number, in order to complete your KYC before investing in mutual funds via SIP.
• Visit the website of the fund house of your choice to complete your KYC. Then give the needed information, including a soft copy of your PAN card and address verification.
• Once your KYC for SIP investments has been completed successfully, you must go to the fund house’s website and search for the “Register” or “New Investor” link.
• The next step is to select how long you want to commit to it. The length might be anywhere from six months to however long you wish to continue investing.

Choose a certain date that you want to invest in each month. The most convenient way to invest in mutual funds for a longer length of time and build wealth is through SIPs. It is crucial to maintain an investment over the full investment time because of this.