Calculate your systematic investment returns and plan your future.
Understand SIP returns, explore the formula, and plan your investments with confidence.
SIPs have become a popular method for building wealth in India, especially among the salaried middle class. This is particularly true for mutual fund SIPs, where retail investors can access the benefits of professional management at a low cost.
An SIP (Systematic Investment Plan) is a method of investing a fixed amount regularly in mutual funds or stocks, allowing individuals to build wealth over time without needing to time the market.
It offers:
- Flexibility
- Affordability
- Rupee-cost averaging
To estimate potential returns, investors can use a SIP calculator—an online tool that calculates the approximate maturity amount based on the monthly investment, duration, and expected rate of return.
While actual returns may vary depending on market performance, the calculator provides a useful estimate to support informed and goal-oriented financial decisions.
A SIP Calculator uses the following formula to predict possible returns:
FV = P × ((([1 + r]^n) – 1) / r) × (1 + r)
Where:
- FV = Future Value of the investment
- P = Monthly investment amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Total number of months
Example:
Suppose you are a salaried individual who wants to invest ₹5,000 every month in a mutual fund through SIP. After evaluating different options, you choose a scheme that offers an average return of 12% per annum. You want to know how much this investment will grow over the next 5 years.
To calculate this using a SIP calculator:
- Enter ₹5,000 as your monthly SIP amount
- Set the investment duration to 5 years
- Enter the expected annual return as 12%
Result:
- Total Investment: ₹3,00,000
- Estimated Future Value: ₹4,12,431.80
- Estimated Returns: ₹1,12,431.80
If you're not satisfied with the maturity amount, you can:
- Increase your investment duration
- Increase your monthly contribution
- Look for a SIP offering higher returns
The calculator gives you a clear breakdown of two key figures:
- Investment Amount: The total amount you invest over time
- Estimated Returns: The potential growth of your investment based on a projected rate of return
By using the SIP calculator, you can get a detailed overview of how your investments may grow over a specific period, depending on your monthly contributions and the expected rate of return. This helps in effective financial planning.
Note: The SIP calculator does not explicitly account for inflation, but you can factor it in manually.
Here’s how:
1. Determine your target real rate of return (the return you want after adjusting for inflation).
2. Use the prevailing inflation rate to calculate the nominal rate of return you need.
3. Input this adjusted rate into the SIP calculator to get a more realistic estimate of your investment growth.
The SIP Calculator on India Corporate is a user-friendly tool that helps you calculate the returns on maturity for your SIP investments.
Steps to use the calculator:
1. Enter the amount you want to invest
2. Enter the duration for which you want to invest
3. Enter the expected rate of return
The calculator will instantly show:
- The total value of your investment after the chosen duration
- The total invested amount
- The estimated returns from the investment
India Corporate’s online SIP calculator offers the following benefits:
- Enables Financial Planning: Helps you understand how much you need to invest regularly to reach your financial goals, supporting better budgeting and long-term planning.
- Compare and Assess SIPs: Easily compare various SIP strategies based on maturity amount, total invested amount, and expected returns to choose the one that suits your goals.
- Free to Access: The calculator is completely free to use and can be accessed anytime, from anywhere.
- Provides Instant Results: Offers quick and accurate estimates, helping you make timely investment decisions.
- Easy to Use: Just enter your investment amount, duration, and expected return to get results in seconds.