SIP Calculator

What is a SIP Calculator?

A SIP Calculator is a simple and quick tool to help investors calculate the potential returns they can get from their mutual fund SIPs. A recent trend shows the increasing popularity of SIPs among millennials and Gen Zs, both as they are much more convenient and allow you to build long-term wealth gradually through disciplined monthly contributions.

This SIP plan calculator lets you know the value of your investments based on three things, namely amount, tenure, and expected rate of return. While this SIP plan calculator provides a quick estimate, the actual returns of a mutual fund scheme might vary depending on various factors. The SIP Calculator doesn't take into consideration the expense ratio or the exit load. Still, it can guide you with a rough projection of your corpus and help you compare it with a lump-sum investment.

What is SIP?

Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly into mutual funds or even stocks, helping you grow your money over time. Imagine that you are saving a fixed amount every month by putting X amount of money in a box. It is surely a disciplined way to save money, but that money just sits there and doesn't actually grow. Hence, you invest money through weekly, quarterly, or monthly Systematic Investment Plans (SIPs).

Why do you need SIP?

The best part of SIPs is their convenience. You don't have to worry about the timing of the market or remembering to invest. Once set up, your contributions happen automatically. This builds consistency, helps you benefit from rupee cost averaging, and grows your money through the power of compounding.

SIPs are flexible, so you can start small and increase your amount as your income rises. If you want to calculate how much your investments can grow with an increase in SIPs amount, try using a Step up SIP calculator online to estimate the potential returns.

SIP Calculator Formula

To calculate the amount you will receive upon maturity of an SIP, also known as the future value, the following formula is used:

Where:

• M is the future value of the SIP
• P is the monthly SIP amount
• n is the total number of installments you made
• r is the periodic rate of interest