Home/ Calculators/ SIP Calculator
Share
Calculating your trading and investment finances made easy. Now access all of your favourite calculators from a common space.
The FYERS SIP Calculator (Systematic Investment Plan) is a valuable tool for anyone looking to invest in mutual funds in India. It simplifies the process of estimating the future value of your investments, allowing you to make informed financial decisions. Whether you are a beginner or an experienced investor, a SIP calculator can help you understand how your money can grow over time through regular investments like equity, mutual funds or hybrid funds.
A SIP Calculator is an online tool that helps you estimate the returns on your investments in mutual funds via a Systematic Investment Plan. SIPs are a popular investment method in India where a fixed amount is invested regularly in mutual funds. This calculator uses basic inputs such as the monthly investment amount, duration of investment, and the expected annual return rate to provide an estimated future value of your investments. By using a SIP calculator, investors can understand how small, regular investments can accumulate significant wealth over time, benefiting from the power of compounding.
A SIP Return Calculator helps investors in multiple ways:
1. Estimate Future Returns: It provides an estimated figure for the future value of your investments, allowing you to plan your financial goals more effectively.
2. Compare Investment Options: It allows you to compare various investment options and choose the one that aligns with your financial objectives.
3. Visualize Growth: SIP calculators offer a graphical representation of how your investment will grow over time, providing a clear picture of the benefits of regular investments
4. Plan Systematic Investments: With a SIP return calculator, you can plan the frequency and amount of your investments systematically to maximize returns.
The FYERS SIP calculators is designed to be user-friendly. Here’s a step-by-step guide on how they work:
1. Input Monthly Investment Amount: Enter the amount you plan to invest every month.
2. Enter Investment Duration: Specify the total period you intend to invest, usually in years.
3. Expected Rate of Return: Provide an estimated annual rate of return based on historical data or your expectations.
4. Calculation: The SIP calculator uses the formula:
Future Value = P x [(1 + r)^n - 1]/r x (1 + r),
where:
P is the monthly investment amount
r is the periodic interest rate (annual rate divided by 12)
n is the total number of investments (months)
5. Result: The calculator instantly provides the estimated future value of your investments.
By this understanding, you can calculate the SIP returns which will help you make better investment decisions, customize your investment plan, and align it with your financial goals.
To better understand how a SIP Calculator works, let’s consider a practical example:
Imagine you are planning to invest in a mutual fund via a SIP. You decide to invest ₹5,000 every month for the next 10 years. Based on past performance, you expect an average annual return of 12%.
Here’s how you can use the SIP calculator to estimate your future returns:
Monthly Investment Amount (P): ₹5,000
Investment Duration (n): 10 years (or 120 months)
Expected Rate of Return (r): 12% per annum (or 1% per month)
Future Value = 5000 × [(0.01 * 3.30039 - 1) / 0.01] * 1.01 = 5000 × 230.039 × 1.01 = 5000 × 232.339 = ₹11,61,695
Result:
After 10 years of investing ₹5,000 monthly at an expected return of 12% per annum, the estimated future value of your investment would be around ₹11,61,695. This amount includes both your principal amount of ₹6,00,000 and the returns earned are ₹5,61,695.
When deciding between SIP and lump-sum investments, it’s crucial to understand the benefits of SIP:
1. Rupee Cost Averaging: With SIPs, you invest a fixed amount at regular intervals, which means you buy more units when prices are low and fewer when prices are high. This process, known as Rupee Cost Averaging, reduces the risk of investing at the wrong time.
2. Disciplined Savings: SIPs instill a habit of regular savings, which is vital for long-term financial health. They help you stay committed to your financial goals.
3. Power of Compounding: Regular investments over a long period allow your money to grow exponentially due to compounding, where you earn returns on your returns.
4. Lower Financial Stress: Unlike lump-sum investments that require a large amount of capital upfront, SIPs allow you to start with a small amount, reducing the financial burden.
5. Flexibility: SIPs are highly flexible. You can start or stop your investments, change the amount, or switch funds based on your financial situation.
While both SIP and lump-sum investments have their place in an investor's portfolio, SIPs offer a more systematic and less stressful approach to building wealth, especially for those with limited initial capital.
The FYERS SIP Calculator is an essential tool for anyone looking to invest in mutual funds systematically. Whether you are saving for retirement, a child’s education, or any other long-term financial goal, a SIP return calculator can guide you in determining how much to invest and for how long to achieve your desired corpus. It helps you estimate returns, compare investment options, and plan your investments better. Whether you're new to investing or a seasoned investor, understanding what a SIP calculator is and how it works can empower you to achieve your financial goals efficiently. So, this is how to calculate SIP returns using the FYERS SIP calculator today and unlock the benefits of systematic investing!
Popular calculators
Brokerage
Calculate your Net P&L after deducting all the charges like Tax, Brokerage, etc.
Margin
Find your required margin
Average Share Price
Calculate the average price you paid for a stock and determine your total cost.
Lumpsum Calculator
Estimate your investment growth. Calculate potential returns on one-time investments easily.
SIP investments in themselves are not entirely tax-free. However, if you invest in specific mutual fund categories like Equity Linked Savings Schemes (ELSS), you can avail of tax benefits under Section 80C of the Income Tax Act. ELSS funds have a lock-in period of three years and can provide tax deductions of up to ₹1.5 lakh per annum. For other types of mutual funds, capital gains tax applies based on the holding period and type of fund (equity or debt).
SIPs do not have a fixed "interest rate" as they are not fixed-income products like fixed deposits. Instead, the returns depend on the performance of the mutual fund in which you are investing. The expected return rate can vary based on market conditions, the type of mutual fund (equity, debt, hybrid), and the fund manager's strategy. Historically, equity mutual funds have offered higher returns,10-15% on average, over longer periods of investment; however they come with higher risks as well.
There is no upper limit on how much you can invest in an SIP. The minimum investment amount for most SIPs starts as low as ₹500 per month, making it accessible for a wide range of investors. The maximum amount you can invest depends on your financial goals, risk appetite, and disposable income. It is advisable to assess your financial situation and consult with a financial advisor to determine the right amount for your SIP investment.
Several factors should be considered when selecting a mutual fund for SIP investment, including:
- Fund Performance: Look at the historical performance of the fund over different market cycles.
- Fund Manager Expertise: The experience and track record of the fund manager are crucial.
- Expense Ratio: Lower expense ratios can enhance returns in the long run.
- Fund Type: Choose a fund type (equity, debt, hybrid) based on your risk appetite and investment horizon.
- Investment Objective: Ensure the fund aligns with your financial goals, such as wealth creation, retirement planning, or child education.
- Risk Profile: Understand the risk associated with the fund and ensure it matches your risk tolerance.
Yes, you can modify your SIP amount. Most mutual funds offer flexibility to increase or decrease the SIP amount based on your changing financial circumstances. You can either start a new SIP with the desired amount or modify the existing SIP by submitting a request to your fund house or through your investment platform. However, it is advisable to check with your mutual fund provider regarding the process and any associated conditions or charges.
You have successfully submitted your partnership request form. You will be hearing us soon!
