SBI SIP Calculator - Calculate Mutual Fund SIP Returns
SIP investing is one of the most popular and most accessible investing options available to the common man. It allows investors to invest a small amount of money regularly over a period of time. SIP investing inculcates financial discipline among investors. One can use an SBI SIP calculator to calculate the potential returns from their investments.
SBI SIP Calculator
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What is a systematic investment plan SIP?
Systematic Investment Plan (SIP) is one of the ways of investing in mutual funds. In SIP, the investors save and invest small amounts regularly. It is one of the easiest ways for a common man to enter the stock market and get exposure to equities. SIP investing best works for the long term (5+ years).
A major advantages of SIP investing are managing volatility and rupee cost averaging. Since the investors invest over a long period, the average cost of each unit comes down. Hence reducing the cost of investing and in turn helping in boosting returns.
SIP, coupled with long term investing helps boost investors returns through compounding. This means the returns get multiplied by staying invested for the long term. This will help one to accumulate substantial wealth.
SIP is an excellent tool to fight market volatility. During market lows, if the investors continue to invest in mutual funds through SIP, they can accumulate a greater number of units at a lower cost. And when the markets grow, the investor will benefit from higher returns. But this doesn't happen over a period of a couple of months but in the long term. Hence the longer one holds their SIP investment greater is the probability of getting better returns.
SIP investing is quite flexible and easy. Once a SIP investment starts, the investors need not worry about investing regularly as the SIP amount gets auto-debited from their bank account. Also, one can start investing in SIP at an amount as low as INR 500. Additionally, one can pause their SIP in case they are facing any financial crunch. They can also re-start their SIP whenever they want.
Step-up SIP is an option available to investors to increase their SIP investments periodically.
Inflation affects the returns from any investment. To keep up with inflation, one has to increase the investment amount periodically. With SIP step up, one need not worry about increasing their investment as it is done automatically. All one has to do is select the SIP amount and the step-up amount or percentage and the tenure for step-up. SIP step-up allows investors to fulfil their financial goals as planned and get inflating adjusted returns.
SIP returns are usually calculated using the XIRR function on MS Excel. However, one can also use a SIP calculator to find out the potential return from a SIP investment. SBI mutual fund SIP calculator is an excellent tool
What is an SBI SIP calculator?
A SIP calculator helps an individual to estimate their mutual fund SIP returns. The SIP returns calculator works on the data inputs such as investment amount, investment amount, mutual fund name, etc. On the basis of the data given, the calculator computes the potential returns. It determines the wealth gained through the MF investments.
However, it is important to note that the SIP returns calculator doesn’t guarantee returns and is just an estimation of potential returns. The actual returns may vary depending on the mutual fund’s performance. The returns can be either higher or lower than the estimation based on the current performance of the fund. One can calculate SBI SIP returns using this calculator.
The SBI SIP calculator estimates returns as per the compound interest and number of times the compounding is applicable. With the SBI mutual fund SIP calculator, individuals can enter the monthly investment amount, duration of investment (number of years) and expected rate of return from SIP. The SBI SIP calculator will automatically calculate the maturity amount along with the wealth gained out of the SIP investment.
The calculator requires the following inputs
- Monthly SIP: This is the amount an individual wishes to invest every month in a mutual fund.
- Investment Period (in years): It is the duration of the investment. Ideally, for all equity MF investments, longer the duration, higher is the potential to earn significant returns. Therefore, it is advisable to have a longer investment duration.
- Return (%): It is the expected return from an investment.
- Step up (%): Stepping up SIPs will help individuals achieve their goals faster. In other words, they can create a significant corpus faster if they are able to step up SIPs every year. Ideally, it should be equal to the average annual pay hike. 10% step up is advisable.
Upon entering the above details, the calculator computes the following values:
- Total Investment: It is the sum of all the SIPs until the end of the investment tenure.
- Wealth Gained: This is the total amount gained by investing in a SIP for the entire duration of the investment period.
- Maturity Value: Maturity value is the total amount one can expect from their mutual fund SIP investments. This is the value one can get at the end of their investment tenure.
The calculator also provides a graphical representation (SIP Investment Chart) of the investments. The chart depicts a comparison in maturity amount and total investment amount.
How to use an SBI SIP Calculator?
Scripbox's SBI SIP calculator is available online and is free to use. One can calculate SBI SIP returns using this calculator. To be able to determine the potential returns, one has to visit the Scripbox website.
Scripbox’s SIP calculator has two approaches to calculate returns: monthly SIP approach and target amount approach.
Monthly SIP Approach
If an individual selects a monthly SIP approach, they have to enter the following details:
- Monthly SIP investment amount
- Investment period in years
- Expected return (%)
- Step up (%)
Let us understand the calculator with an example. Ms Kajal wishes to determine the potential returns from her SIP investments. The monthly investment amount she wishes to invest is INR 15,000 and for a tenure of 20 years. She expects a 12% return from the investment. Also, she plans to step up her investments by 10% every year.
Therefore, with the help of the calculator, the estimated returns for Ms Kajal are
- Wealth gained: INR 1,95,24,713
- Maturity value: INR 2,98,33,073
Target Amount Approach
Now let us understand how the target amount approach of the SIP mutual fund calculator works. With the target amount approach, an individual can determine how much they have to invest per month to earn the target amount at the end of the investment tenure. For this, one has to enter the following details:
- Set a target amount: The amount that one wishes to earn
- Investment period: Time period after which they want to earn the target amount
- Return (%): Expected return from the investment
- Step up (%): Annual step up percentage.
For example, if Mr Karthik wishes to save INR 1 crore at the end of 15 years. Also, he expects a 12% return from his investment. Furthermore, he plans to step up the SIPs by 10% every year.
To achieve his target amount, Mr Karthik has to invest INR 11,516 per month.
The total wealth gained is INR 56,10,681, and the total investment amount would be INR 43,89,319.
How can an SBI SIP Calculator help you?
Following are the benefits of SIP calculator:
Ease of use
The SBI SIP calculator helps to estimate potential returns from investments. It helps in determining the returns from a SIP investment. It also helps in determining the required SIP investment amount for a target amount.
The calculator provides accurate results based on the inputs given by the individual. However, it is important to note that the results are just an estimation. Moreover, the calculator doesn’t guarantee returns. Therefore, one should only use the calculator only to estimate returns from their investments.
The calculator determines the results faster. One doesn't have to worry about doing the complex calculations manually. The calculator saves the efforts of an investor from doing the math and also their time.
By computing the estimated returns using the calculator, it helps an individual in better planning their investments. In other words, one can determine the returns and accordingly allocate more funds towards other SIPs or investments. This way, one can build a corpus faster to achieve their financial goals.
Free to use
The SIP calculator is available online on Scripbox's website and also is free to use. Therefore, one can use the calculator to calculate returns as well as to compare multiple scenarios. Also, using the mutual fund calculator multiple times to determine the mutual fund SIP returns. This can help individuals make informed investment decisions as this will allow them to compare different SIP plans.
SIP vs Lumpsum investment - How to choose?
Both SIP and lump sum investments enable investors to invest in mutual funds. However, the investment process varies in both methods. In lump sum investing, the investors invest an amount only once. Whereas in SIP investing, the investors invest small amounts in regular intervals for a long term.
In lump sum investing the investor should have a substantial disposal amount in hand with a better understanding of risk. Whereas, in SIP investing, the investor can invest in small amounts and need not worry about market timing or market volatility.
To estimate lumpsum returns, one can use a mutual fund lumpsum calculator. Whereas, for calculating SIP returns, one can use a mutual fund SIP calculator.
Investors can choose a lump sum route or SIP route for investing in mutual funds. However, they have to consider the following before choosing one.
- Availability of funds: An investor who can invest a substantial amount of money at once can choose a lump sum route. But if the investor has limited funds available and can invest only a small amount regularly, then they can pick the SIP route.
- Understanding of risk: If the investor has a better understanding of market timing and volatility, then the investor can choose the lump sum route. Else they can choose the SIP route.
Though the above factors play a major role in choosing the investment route, SIP investing has few advantages over lump sum route. Following are the benefits of SIP investing:
No need to time the market
One need not time the market when investing through SIP investment. This is because one can invest in mutual funds through SIP for a long term covering all market cycles. This will eliminate the need to time the market before investing.
Rupee cost averaging
Investing through SIP over a long term will help accumulate a greater number of units when the market is falling and a smaller number of units when the market is going up. This will help investors reduce their average cost of investing.
SIP investing is a one-time process. One can start a SIP and forget about it. This is because SIP investments are linked to the bank account of the investors, and the money gets auto-debited from there. Hence this inculcates financial discipline in investors.
Ideal for new investors
For new investors who want equity exposure, SIP is the best way to start their investing. This will allow them to test the markets before actually starting full-fledged investments. Also, people who just started earning can set aside small amounts of money for their future goals through SIP.
Power of compounding
Investing and staying invested for a long term will not only reduce the average cost of investing but also boosts the returns through the power of compounding. SIP and long term investing will help investors accumulate more wealth.
Best funds to invest through SIP
Following are the best SIP plans to invest
|Mirae Asset Tax Saver Fund (G)||ELSS - Tax saving|
|Motilal Oswal Long Term Equity Fund (G)||ELSS - Tax saving|
|Axis Bluechip Fund (G)||Large Cap|
|HDFC Top 100 Fund (G)||Large Cap|
|L&T Midcap Fund (G)||Mid Cap|
|Nippon India Growth Fund (G)||Mid Cap|
|Axis Small Cap Fund (G)||Small Cap|
|DSP Small Cap Fund (G)||Small Cap|
|Kotak Standard Multicap Fund (G)||Multi cap|
|Motilal Oswal Multicap 35 Fund (G)||Multi cap|
|HDFC Index Nifty 50 fund (G)||Index|
|UTI Nifty Index Fund (G)||Index|
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