SIP Calculator
SIP Calculator
SIP Calculator Overview
A SIP (Systematic Investment Plan) calculator is an economic device that helps investors to estimate the return on their investments over time. It is widely used in financial planning, money management and investment analysis to understand how small, ordinary investments are increasing due to the power in compounding.
Common SIP Calculations:
- Total Investment Amount: The sum of all monthly contributions.
- Estimated Returns: The final corpus based on expected returns.
- Compounded Growth: Calculation using the compound interest formula.
- Lumpsum vs SIP Comparison: Helps decide between SIP and one-time investment.
- Wealth Gained: Difference between total investment and final amount.
Key Uses of the SIP Calculator:
- Investors & Beginners: Estimate future wealth from SIP contributions.
- Financial Planners: Help clients plan long-term investments.
- Retirement Planners: Calculate potential savings for retirement.
- Mutual Fund Investors: Compare various fund returns over different periods.
Key Features of the SIP Calculator:
- Accurate Return Estimation – Uses compounding interest formula.
- Customizable Investment Periods – Choose SIP durations from 1 to 30+ years.
- Supports Different Interest Rates – Adjust based on market conditions.
- Breakdown of Total Investment & Returns – Clear understanding of growth.
User-Friendly Interface – Simple input fields for quick calculations.
How It Works
1. Enter Monthly SIP Amount
- Example: ₹5,000 per month
2. Enter Expected Annual Return Rate
- Example: 12% per year (Varies based on market conditions)
3. Enter Investment Duration
- Example: 10 years
4. Click ‘Calculate’
- The tool applies the SIP formula and displays the estimated corpus.
Examples
Example 1: SIP Investment Growth
Input:
- SIP Amount: ₹5,000 per month
- Expected Return Rate: 12% per year
- Investment Duration: 10 years
Formula:
M=P×r/ (1+r)n−1×(1+r)
Where:
- MMM = Final Corpus
- PPP = Monthly Investment (₹5,000)
- rrr = Monthly Interest Rate (12% ÷ 12 = 1%)
- nnn = Total Months (10 × 12 = 120 months)
Result:
- Total Investment: ₹6,00,000
- Estimated Returns: ₹11,61,695
- Final Corpus: ₹17,61,695
Example 2: SIP vs Lumpsum Comparison
Input:
- SIP: ₹5,000/month for 10 years
- Lumpsum: ₹6,00,000 one-time investment
- Return Rate: 12% per year
Results:
- SIP Final Corpus: ₹17,61,695
- Lumpsum Final Corpus: ₹18,63,292
SIP is better for risk management, while lumpsum gives higher returns if invested at the right time.
Reference Tables
Here is a SIP (Systematic Investment Plan) Calculator Reference Table for common investment scenarios:
SIP Investment Scenarios
Monthly Investment
Investment Period
Expected Return Rate
Maturity Amount
Total Investment
Total Profit
₹5,000
10 years
12%
₹11,61,695
₹6,00,000
₹5,61,695
₹10,000
15 years
10%
₹41,32,713
₹18,00,000
₹23,32,713
₹15,000
20 years
12%
₹1,80,07,114
₹36,00,000
₹1,44,07,114
₹20,000
25 years
10%
₹2,65,76,165
₹60,00,000
₹2,05,76,165
SIP Components
Factor
Description
Monthly Investment
The fixed amount invested every month.
Investment Period
The duration of the SIP, usually 5 to 30 years.
Expected Return Rate
The estimated annual return from the investment (e.g., 10-15%).
Maturity Amount
The final amount at the end of the investment period.
Total Investment
The sum of all monthly contributions over time.
Total Profit
The gain earned through interest and market growth.
Additional Information
FAQs
1. What is a SIP calculator and how does it work?
A SIP (Systematic Investment Plan) Calculator is an online tool designed to help investors estimate the possible return on investments in the equity fund made through regular, fixed contributions. By entering details such as the monthly investment amount, investment duration and expected annual return, the calculator helps the future value of investment in effective financial planning.
2. How do I calculate the future value of your SIP investment using the SIP calculator?
To calculate the future value of your SIP investment, set the monthly investment amount, the total investment period this year and the required annual return to the SIP calculator. The device uses these inputs to calculate the estimated maturity amount, giving a clear picture of how your investment can increase over time.
3. Why should I use the SIP calculator for my investment?
By using a SIP calculator, you can plan your investments strategically, which can provide estimates of return, you can expect for a specific period. It helps to determine the amount required to invest regularly to achieve your financial goals and allow you to compare different investment scenarios by adjusting the investment amount, duration and variables as the required return.
4. Can a SIP calculator have an account for inflation in the estimates?
Some SIPs offer an alternative to adapting to calculator inflation, which in today's terms provide more realistic estimates of the future value of your investment. By activating this feature and entering the expected inflation rate, you can understand the purchasing power of your accumulated corpus at the end of the investment period.
5. Are online sip calculators accurate?
Online SIP Calculators provide estimates based on the eclipse speed and returns given by you. While using standard financial formulas to project future values, real returns may vary due to rashes of the market and other factors. Therefore, the results should be regarded as estimates rather than guaranteed results.