SIP Calculator – Systematic Investment Plan Calculator

A Systematic Investment Plan (SIP) is an efficient and disciplined way to invest in mutual funds or other financial instruments. It allows individuals to contribute a fixed amount regularly, typically on a monthly or quarterly basis. SIPs are designed to create long-term wealth through small, consistent investments.

Key Benefits of SIP for Investors:

• Rupee Cost Averaging: Benefit from market volatility by purchasing more units when prices are low and fewer when prices are high.
• Compounding Power: Returns compound over time, meaning you earn returns on both the principal and the accumulated returns.
• Long-Term Growth: Ideal for retirement planning, children's education, or wealth accumulation.
• Flexibility and Convenience: Start with small amounts and adjust as needed.
• Automatic Investment: Ensures regular contributions and disciplined savings.
• Low Risk through Diversification: Reduces the risk of market timing and large lump-sum investments.

How Can an SIP Calculator Help You?

The SIP calculator helps plan and project your future wealth based on SIP contributions. It helps in:

• Simulating different investment plans.
• Determining the SIP amount needed to reach a specific financial goal.

How to Use One Crore SIP Calculator?

• Enter your monthly SIP amount (the amount you plan to invest every month).
• Select the investment duration (number of years you want to stay invested).
• Input the expected rate of return (the annual return rate you anticipate from your investment).

Once you've entered the values, the calculator will instantly display the estimated amount you could receive after your investment tenure, helping you work towards your goal

How do SIP calculators work?

A SIP plan calculator uses the following formula:

A = B × ({[1 + r]^t – 1} / r) × (1 + r).

Where:

• A is the maturity amount you receive.
• B is the amount you invest at regular intervals.
• t is the number of payments you have made.
• r is the periodic rate of interest.

For example, if you invest Rs. 5,000 per month for 12 months at a periodic rate of interest of 12%, the monthly rate of return would be:

12% / 12 = 1% or 0.01

Using the formula:

A = 5,000 × ({[1 + 0.01]^12 – 1} / 0.01) × (1 + 0.01)

This gives an approximate maturity amount of Rs. 64,047 in a year.

Please note, the rate of interest on an SIP may vary based on market conditions, potentially affecting your returns.

Advantages of Using an SIP Calculator

• Projects future wealth accumulation.
• Demonstrates the power of time in growing investments.
• Allows customization of amounts, tenures, and expected returns.
• Helps set specific financial goals and plan investments accordingly.

*Disclaimer: This tool does not guarantee accuracy or investment performance. Mutual fund investments are subject to market risks. Please read all relevant documents before investing.