In ULIP, the investment risk in the investment portfolio is borne by the policyholder
SIP Calculator – Systematic Investment Plan Calculator
(Check the estimated returns from your SIP)
A SIP calculator is an online tool that helps in estimating returns on your mutual fund investments,... helping you achieve long-term goals and build wealth. The systematic investment plan calculator harnesses the power of compounding to get you the estimates. Read more
Investment Amount(Monthly)
Interest Rate(P.A)
Investment Tenure(Years)
Consistent investing through SIPs helps you reach your financial goals, but a ULIP adds a layer of security, ensuring those goals are still attainable even if you're not around.
Know MoreWhat is SIP Calculator?
A SIP plan calculator is a user-friendly financial tool designed to project the potential growth of your mutual fund investments made via a Systematic Investment Plan (SIP). It helps you calculate SIP and visualize how regular and disciplined investing can build wealth over time.
By entering your monthly investment amount, tenure, and an expected annual rate of return, the systematic investment plan calculator estimates your total capital gain and the final maturity value. However, it is important to remember that calculation of SIP returns in mutual funds are illustrative projections and not guaranteed outcomes. Actual returns will vary based on market performance. Furthermore, SIP maturity calculators usually do not factor in costs such as the expense ratio or any applicable exit loads, which can impact the final amount you receive.
How Can an SIP Return Calculator Help You?
A SIP investment calculator is a versatile planning tool that empowers investors to approach their financial goals strategically. You can use it to determine the monthly investment needed to reach a specific target or to estimate the investment duration required for your current SIP to grow. This makes it invaluable for planning major life events like retirement.
The key benefits of using a systematic investment plan calculator include:
- It provides a clear estimate of your investment's future value and the potential returns you can expect over time.
- It allows you to work backward from a financial target, helping you calculate the exact monthly SIP amount needed to achieve your goal within a set timeframe.
- The calculator illustrates the distinction between your total capital invested and the wealth gained through the power of compounding.
How do SIP Calculators Work?
A SIP calculator operates on a standard financial principle to estimate the future value of your investments. The formula to calculate return on SIP is as follows:
M = P × ( { [1 + i]^n – 1 } / i ) × (1 + i)
Here is what each variable in the SIP calculator formula represents:
- M: The projected maturity amount
- P: The principal amount invested per period
- n: The total number of investment installments
- i: The expected monthly rate of return.
Let us assume you plan to invest ₹5,000 per month for 2 years with an expected annual return of 12%.
First, we calculate the monthly rate of return (i):
12% per year / 12 months = 1% per month, or 0.01.
Now, we apply these values to the formula:
M = 1,000 × ( { [1 + 0.01]^12 – 1 } / 0.01 ) × (1 + 0.01)
The SIP calculator yearly will yield an estimated maturity amount of approximately ₹13,53,249.
It is important to note that this formula relies on the expected rate of return. In reality, returns from mutual funds fluctuate based on market performance. Therefore, the actual amount may vary.
SIP Calculation Formula
Formula:
-
FV = P × ((1 + r)n - 1) / r) × (1 + r)
Where:
- FV = Maturity amount (total value of your investment at the end of the tenure)
- P = SIP amount (the amount you invest every month)
- n = Investment duration
- r = Expected return rate per month (annual return rate divided by 12)
Here is an example to understand this better:
Suppose you invest ₹7,000 per month for 3 years (36 months) and expect an annual return of 10%.
Monthly return rate (r) = 10% ÷ 12 = 0.0083 (0.83%)
Number of months (n) = 36
Now, using the formula:
FV = 7000 × ((1 + 0.0083) 36 - 1) / 0.0083) × (1 + 0.0083)
After the calculation, the maturity amount would be ₹3,02,772. Here, the total invested amount would be ₹2,52,000, and estimated returns would be ₹50,772.
How to use SIP Calculator?
The calculator SIP is an intuitive tool designed for quick and easy financial planning. You can follow these simple steps to estimate your potential investment growth:
Step 1: Input Your Investment Details
Enter the following three key variables into the designated fields:
- Monthly investment amount
- Investment tenure (in years)
- Expected annual return (%)
Step 2: Review Your Projected Results
Once the details are entered, the calculator will instantly display your investment's potential, usually broken down into:
- Total amount invested
- Total wealth gained
- Projected maturity value
Turn disciplined investing into wealth creation- with benefit of life cover as well
Advantages of using SIP Calculator
Incorporating an SIP calculator into your financial planning offers several advantages:
1.Accuracy:
The calculator uses strong algorithms to provide precise estimates of your investment’s future value, helping you make informed decisions.
2.User-Friendly:
The tool is designed to be user-friendly, and has an intuitive interface, making it accessible to even those new to investing as well as experienced investors.
3.Speed and Convenience:
Instant calculations save you time and effort, allowing you to focus on planning and assessing different investment scenarios.
4.Goal-Based Planning:
The SIP compounding calculator can help you set specific financial goals and determine the SIP amount required to achieve them. by letting you adjust variables.
5.Realistic Expectations:
By providing a realistic estimate of your future wealth, the calculator helps you set achievable financial goals and manage your expectations.
Conclusion
Starting on an investment journey in mutual funds, ULIPs, etc. can seem overwhelming, but tools like the SIP calculator simplify the process. Instead of doing manual calculations, you can use an SIP calculator online to get instant and accurate results, making your investment planning much easier.
By providing clear projections of your investment’s potential growth, it empowers you to make informed decisions and stay on track toward your financial aspirations. Whether you are new to investing or a professional, an SIP calculator can be invaluable in your investment toolkit!
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Disclaimers-
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.