SIP Calculator – Calculate SIP Investments Return 2024

Popular SIP Plans November 2024

Schemes	Fund Type	Till Date Returns
Parag Parikh Flexi Cap fund	Flexi Cap	18.60%
Mirae Asset Tax Saver Fund	Tax Saving	17.80%
Canara Robeco Emerging Equities fund	Large & Mid Cap	16.90%
ICICI Prudential US Bluechip Equity Fund	US Equity	15.50%
Nippon India Value Fund	Value Fund	16%

Scripbox’s Recommended: Best Mutual Funds for SIP in 2024

What is SIP Calculator?

A SIP Calculator is an online tool that estimates the return from a SIP investment. The calculator works on the inputs given by the user. It requires simple inputs like investment amount or target amount, expected rate of return, investment tenure, and step-up rate. Scripbox’s SIP calculator gives the output in both graphical and chart format. The investment amount, potential capital gains and maturity amount are clearly shown.

The calculator works on the investment amount approach and target amount approach. The investment amount approach is the most used one where the investor inputs the investment amount, return expected, tenure and step-up amount. The target amount approach uses the target amount the investor wants to achieve in the said duration to estimate the current investment required.

Scripbox’s SIP calculator estimates the return in terms of maturity amount based on three different growth scenarios. They are above average, average, and below-average.

It is to be noted that the SIP calculator only gives an estimate based on the inputs provided. The SIP Calculator doesn’t guarantee any returns. The return from any mutual fund depends on the performance of the fund. Also, the actual return from the mutual fund investment can be higher or lower than the estimate provided by the SIP Calculator.

Related Calculators

• Mutual Fund Returns Calculator
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• STP Calculator
• Mutual Fund Lumsum Calculator

How Does the Mutual Fund SIP Calculator Work?

The mutual fund SIP calculator estimates potential return using the compound interest formula. The calculator takes into account the number of times compounding is applicable and estimates the potential returns. Furthermore, the SIP calculator requires one to enter the monthly amount they want to invest, the duration of the investment (in years) and the expected rate of return on the SIP.

The online SIP calculator will automatically calculate the maturity amount and also the wealth to be gained from the mutual fund investments. One can also choose to enter the target amount matching their financial goal and reverse calculate the monthly amount to be invested for the given tenure and rate of growth.

How to Calculate SIP Investments Return?

SIP return can be calculated using absolute return, annualized returns, CAGR, and XIRR. However, CAGR is the most effective method to estimate SIP returns. CAGR or Compound Annual Growth Rate is the rate at which an investment grows each year for the entire tenure of the investment. Following is the formula of CAGR:

CAGR = (ending value/beginning value) ^ (1/number of years or months) – 1*100

Where,

Ending value is the NAV at the time of withdrawal,
Beginning value is the NAV at the time of investment.
A number of months or years is the tenure of the investment.

Example

Mr Anudeep has invested INR 2,52,000 (INR 3,000 a month) in a mutual fund when the NAV is INR 20. At the time of withdrawal after seven years, the NAV is INR 50. Using the CAGR formula, we can estimate SIP returns for Mr Anudeep.

CAGR =(ending-value/beginning – value) ^ (1/number-of-years) – 1* 100
CAGR = (((50/20) ^ (1/7)) – 1) * 100
Compounded Annual Growth Rate = 13.98%

This means the investment has grown 13.98% each year for a tenure of 7 years. The return will remain the same in terms of months as well.

CAGR = (((50/20) ^ (12/84)) – 1) * 100
CAGR = 13.98% ~ 14%

Hence the investment of INR 2,52,000 will grow to INR 4,29,076 in 7 years.

How to use Scripbox’s Systematic Investment Plan Calculator?

While investing, everyone is curious to estimate their potential returns. Estimating returns ensures the investor whether or not the chosen SIP will help them realize their financial goals or not.

Scripbox’s online SIP calculator is available on our website. One can estimate the potential returns on their SIPs at the end of their investment tenure with the help of our SIP calculator. Scripbox’s SIP calculator provides two approaches to estimating the wealth and maturity amount, i.e. ‘Investment Amount’ and ‘Target Amount’.

Investment Amount Approach

The investment amount approach to estimate potential SIP returns will help individuals who know how much they like to invest monthly. Under this approach, one has to follow the below steps to determine their potential returns:

• Firstly enter the monthly investment amount
• Next, enter the expected growth rate
• Enter the investment duration in years
• Finally, enter the step up percentage. Step Up is an increase in the investment amount every year in line with the investor’s income growth. In other words, investors can increase their SIP investments every year by the step-up %. This helps to achieve financial goals faster and systematically. The step-up % should generally be equal to the rise in the individual’s annual pay.

The calculator will automatically estimate the potential gains at the end of the investment tenure. Also, one can view the calculation of SIP Maturity Amount either in a chart or table form. The investment graph provides a visualization of the maturity amount and the wealth gained during the investment tenure. In the table format, one can easily identify the Step-Up value every year (indicated with a blue arrow).

Furthermore, the Scripbox SIP calculator estimates maturity amount based on three growth scenarios – Above average returns, average returns and below-average returns.

Target Amount Approach

The target amount approach helps in estimating the monthly investment (SIP) amount one needs to invest to achieve their financial goal. However, for this, one should know the final amount they wish to have at the end of the investment tenure. Under this approach, one has to follow the below steps to determine the monthly investment amount:

• Firstly, provide the expected target amount
• Now, enter the expected growth rate
• Next, enter the investment duration in years
• Finally, enter the step up percentage. Step Up is an increase in the investment amount every year in line with the investor’s income growth. In other words, investors can increase their SIP investments every year by the step-up %. This helps to achieve financial goals faster and systematically. The step-up % should generally be equal to the rise in the individual’s annual pay.

The online SIP calculator will automatically estimate the SIP target amount. Also, in the ‘Calculation of the SIP target amount’ table, one can find the details of their investments. Such as years, investment amount, interest earned and maturity amount. Furthermore, in the table, one can easily identify the Step-Up value every year (indicated with a blue arrow).

Furthermore, it is important to know that mutual fund investments are subject to market risks. Hence, investors should be mindful of the risks and understand the calculator is just an estimate of the potential returns and doesn’t guarantee them.

What are the Benefits of the Scripbox’s SIP Calculator?

Research and analysis are necessary before making an investment decision. Also, one must estimate the potential returns before investing to analyze if it is a profitable investment opportunity or not. Furthermore, it is essential to make sure the financial objective of the investor and the investment objective of the asset are aligned. This enables investors to choose the right asset that will help them realize their goals faster.

Let us now see how can the SIP return calculator help you:

• Estimate maturity amount: The SIP mutual fund calculator helps investors to estimate their potential returns at the end of the investment duration. It also helps in estimating the monthly investment amount if the investor knows how much they want to earn at the end of their investment tenure.
• Easy to use: Scripbox’s SIP calculator is quite easy to use and navigate. One has to enter the required details to estimate their returns. Also, the calculator saves investor’s time from doing complex calculations. The calculator estimates the maturity amount and also the monthly investment amount within seconds.
• Graphical and Tabular Representation: The SIP mutual fund calculator shows the return estimates in both graphical and tabulated forms. This helps investors to interpret the returns and make informed decisions easily.
• Maturity amount based on growth scenarios: The SIP calculator estimated the returns based on three growth scenarios. The three growth scenarios are based on above average, average and below-average returns. Therefore, potential investors can choose the scenario that aligns with their investment requirements and start investing.
• Step Up: The Scripbox SIP calculator provides an opportunity for the investor to step-up their investments annually. In other words, stepping up SIPs will help in achieving the financial goals faster. Also, the step-up details can be found in the table format of the maturity amount estimation.
• Informed Decision: Investors can compare multiple return scenarios using the free online SIP calculator and also make the right investment decisions that will help them earn significant returns.

How to Start an SIP?

The SIP mutual fund investments can be made in the following 3-steps:

• Step 1: Understand the objective of the investment before moving forward with the investment. Once your financial goals are set, it will help you in identifying the right asset class for your investment.
• Step 2: Choose the right category of a mutual fund based on the exposure you wish to have in equity or debt as per step-1.
  Before actually making the investment, you will be required to complete the application form, submit identity and address proof and complete KYC details.
• Step 3: Select the date of SIP. You can either do it yourself or enable the auto-debit option. Under this, the amount will automatically debit from your bank account on the specified date.

Tax Implications for an SIP

Based on the type of mutual funds capital gains from SIPs attract long term and short term capital gains tax. Each SIP instalment be taxed based on the holding period. 

Equity mutual funds attract short term capital gains if the investment holding period is less than one year. The short term capital gains are taxed at 15%. On the other hand, if the holding period is more than one year, the long term capital gains above INR 1,00,000 are taxed at 10%. 

For debt mutual funds if the investment holding period is less than 3 years, the short term capital gains are added to the investor’s total taxable income and are taxed as per the applicable IT slab rates. On the other hand, if the holding tenure is more than three years, the long term capital gains are taxed at 20%. 

From April 1st 2023, capital gains from debt mutual funds will be taxed as per the investor’s IT slab rate, irrespective of the investment holding period. Thus, the LTCG benefit will no longer be available for debt mutual funds.

Five Common Mistakes to Avoid While Making a Systematic Investment Plan

Here are the most common mistakes that you should avoid while investing through SIPs:

• Not having clear financial goals: Without knowing what you want to achieve, it is hard to choose the right fund, investment amount, duration, and asset mix for your SIP. 
• Investing blindly: Investing without doing proper and independent research can lead to bad investment choices. You should not invest in something that does not align with your goals. 
• Trying to time the market: SIPs help you average out the market fluctuations by investing at regular intervals. You should not try to predict the market movements based on short term trends. You should focus on the long term instead. 
• Not tracking your investments: You must regularly monitor your investment performance and portfolio composition. 
• Not seeking professional help: If you aren’t an expert in selecting the right fund or asset, it is advisable to consult a financial advisor. These professionals help you plan your goals, select the best schemes, and maximise your returns.

Frequently Asked Questions

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