SIP Calculator HDFC - Calculate Mutual Fund SIP Returns
Investing in mutual funds through SIP is one of the most popular and accessible ways available to the common man. In SIP investing, an investor invests a certain amount regularly. SIP benefits investors in more than one way. To estimate their potential returns from a SIP investment, one can always use SIP calculator HDFC.
SIP Calculator HDFC
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What is a Systematic Investment Plan SIP?
Systematic Investment Plan (SIP) is one of the most popular investing routes available to investors. Investors can invest in mutual funds through SIP. In SIP, investors invest a certain amount regularly in mutual funds over a period of time. Financial experts consider SIP to be one of the easiest ways to get exposure to the stock market and equities. SIP, coupled with long term investing, can help an investor reap a higher return.
SIP investment provides many benefits to investors, and one of the major ones is rupee cost averaging. When investors invest through SIP for the long term, they keep buying the mutual fund scheme units across different market cycles. When the market goes down, they buy a higher number of units, and when the market goes up, they get a smaller number of units. Hence the average cost of investing for the investors goes down. This will, in turn, boost returns in the long run.
SIP helps investors fight market volatility. When the investor invests regularly, they benefit from rupee cost averaging. And when the markets grow, their returns boost due to the lower cost of investing. However, if the market falls, their portfolio will be least affected. Hence investors are advised to stay invested for a longer horizon. The longer the investment horizon, higher is the probability of getting better returns.
Investing through SIP is quite flexible and easy.
The auto-debit facility will help investors to invest regularly. Investors can invest with an amount as low as INR 500. Additionally, they can pause, stop or cancel the SIP anytime. They also have the option to restart it whenever they want.
SIP has an excellent option where investors can step up their investment. Through step-up SIP, investors can increase the amount of investment periodically. Investors can either increase their SIP with a certain amount or certain percentage every year. This will help them fight inflation. Also, it will help them reach their financial goal faster.
Calculating SIP returns manually can be tedious and time taking. Hence investors use the XIRR function in MS Excel to do the same. However, investors can use the HDFC SIP calculator to calculate returns (potential returns) from a SIP investment.
What is an HDFC SIP Calculator?
A SIP calculator helps in estimating mutual fund SIP returns. This mutual fund calculator works on the data inputs such as investment duration, investment amount, mutual fund name, etc. The calculator computes potential returns on the basis of the data given. It determines the wealth gained through the mutual fund SIP investments.
Also, it is important to note that the SIP calculator doesn't guarantee returns, and it just estimates potential returns. Mutual fund returns are market-linked and actual returns of the fund may vary. The returns can be either lower or higher than the estimation based on the current performance of the fund. One can calculate HDFC SIP returns using this calculator.
The HDFC SIP calculator estimates returns as per the compound interest and also the number of times the compounding is applicable. With the HDFC mutual fund SIP calculator, one can enter the monthly SIP investment amount, duration of SIP (number of years) and expected rate of return from the investment. The HDFC SIP calculator automatically calculates the maturity amount along with the wealth gained from the SIP investment.
Following are the inputs to the HDFC SIP calculator:
Monthly SIP: The amount an investor wishes to invest every month in the mutual fund.
Investment Period (in years): It is the number of years an investor wishes to invest. Ideally, for all equity mutual fund investments, longer the duration, higher is the potential to earn significant returns. Therefore, it is advisable to have a longer investment horizon.
Return (%): It is the expected rate of return from an investment.
Step up (%): Stepping up SIPs will help one in achieving their goals faster. In other words, one can create a significant corpus faster if they step up the SIPs every year. Ideally, the step-up percentage should be equal to the average annual pay hike, i.e. 10%.
The calculator computes the following values on the basis of the above inputs:
Total Investment: It is the sum of all the SIPs until the end of the investment tenure.
Wealth Gained: It is the total amount gained by investing in the mutual fund through SIP, for the entire duration (investment period).
Maturity Value: Maturity value is the total amount that one can expect from their MF SIP investments. It is the value one may get at the end of their investment tenure.
Also, this mutual fund calculator provides a graphical representation (Investment Chart) of the investments. The chart depicts a comparison of the total investment amount and maturity amount.
How to use an HDFC SIP Calculator?
Scripbox's HDFC SIP calculator is available online, and one can use it for free. One can calculate HDFC SIP returns using the calculator. To determine the potential returns, one has to visit the Scripbox's website.
Following are the two approaches through which one can determine potential returns using Scripbox’s SIP calculator:
Monthly SIP Approach
Upon selecting the monthly SIP approach, one has to enter the following details:
- Monthly SIP investment amount
- Investment period in years
- Expected return (%)
- Step up (%)
Let us understand how the calculator works with an example. Ms Seema wants to determine the potential returns from her SIP investments. The monthly amount she wishes to invest is INR 10,000 and for a tenure of 15 years. She expects a 12% return from the investment. Also, she plans to step up her SIP plans by 10% every year.
With the help of the calculator, the estimated returns for Ms Seema are
- Wealth gained: INR 48,71,557
- Maturity value: INR 86,83,849
Target Amount Approach
The second approach to calculate returns is the target amount approach. With the target amount approach, one can determine the amount that they have to invest per month to earn the target amount at the end of the investment duration. For this, one has to enter the following details:
- Set a target amount: The amount that one wishes to earn while making mutual fund scheme investments
- Investment period: Duration after which they want to earn the target amount
- Return (%): Expected rate of return from the investment
- Step up (%): Annual step up percentage for investments.
For example, if Mr Dinesh wants to create a corpus of INR 2 crore at the end of 20 years. Also, he expects a return of 12% from his investment. Furthermore, he wants to step up the SIP investments by 10% every year.
To achieve his target amount, Mr Karthik has to invest INR 10,056 per month.
The total wealth gained is INR 1,30,90,437, and the total investment amount would be INR 69,09,563
How can an HDFC SIP Calculator help you?
A SIP calculator has the following benefits:
Ease of use
The HDFC SIP calculator helps in estimating potential returns from a SIP investment. In addition to estimating the returns, it also determines the SIP investment amount to reach a specific target amount.
The HDFC SIP calculator gives accurate results based on the inputs provided. However, one has to note that the calculator only provides an estimate for the returns. It doesn’t guarantee any returns.
Calculating SIP returns manually can be tedious and time taking. However, the calculator determines the results within seconds. This saves time and effort of the investors.
The calculator provides an estimate for the probable returns from an investment. This will help investors to plan their investments in a better way. For example, the investors would know how much they would have to increase their investment amount to reach their financial goals.
Free to use
The HDFC SIP calculator is available online at Scripbox’s website. Hence the calculator is free to use. Also, investors can use it to compare multiple scenarios and make informed decisions.
SIP vs Lumpsum investment - How to choose?
Investors can invest in mutual funds through SIP and lumpsum route. However, the way the money is invested differs in both the methods. In SIP investment, investors invest a certain amount of money regularly. However, in lumpsum investment, the outflow of money happens only once. In other words, investors only invest the money once.
In SIP investing, investors need not time the market and worry about volatility. They only need a small amount of money regularly. However, in lumpsum investing, investors are required to have a better understanding of risk. They would need a considerable amount of money in hand to invest.
One can estimate SIP returns through the HDFC SIP calculator. And investors can estimate lumpsum returns through mutual fund returns calculator or lumpsum calculator.
Investors are free to choose a lumpsum route or SIP route for investing in mutual funds. However, they will have to consider the following:
- Availability of funds: Investors who can invest a considerable amount of money at once can choose a lump sum route. However, if the investor can only invest in small amounts, then SIP is the best.
- Understanding of risk: In SIP investing, investors need not worry about market timing or volatility. The same is not true for lumpsum investment.
Benefits of SIP Investing
Financial advisors are biased towards SIP investment due to the benefits it offers to the investors. Following are the benefits of SIP investing:
Timing the market becomes insignificant.
In SIP investing investors invest a certain sum over a period of time covering all market cycles. This will eliminate the need to time the market.
Rupee cost averaging
Investing in mutual funds through SIP for a long term will help in reducing the average cost of investing. This is because when the markets go down, investors can accumulate a greater number of units. And when the market goes up, they can accumulate a smaller number of units.
In SIP, investors invest a small amount every month. This will help the investors to inculcate financial discipline. Since the SIP amount gets auto-debited from the bank account, it becomes easier to practice financial discipline.
Ideal for new investors
SIP is the best way of getting equity exposure and starting an investing journey. This will allow new investors to test the market before they jump into full-fledged investing.
Power of compounding
Investing for the long term will help multiple returns through the power of compounding. Hence investors are suggested to invest for the long term. Also, the earlier they start investing, the longer they can stay invested. Therefore once a person starts earning, they can start investing small amounts through SIP.
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|
Frequently Asked Questions
Is HDFC SIP good?
HDFC mutual funds are one of the most popular and reputed funds in the industry. HDFC Asset Management Company manages them (AMC). The AMC is one of the largest and profitable, managing close to INR 438,299 crore worth of assets. The fund house has close to 200 branches in the country with over 9.4 million active customer accounts and has evolved as a top-rated fund house in the country.
The fund house offers mutual funds for long term, short term and tax-saving purposes. Their simple and comprehensive offerings give investors an opportunity to earn regular income as well as help in wealth creation. The highly skilled fund managers manage funds in all categories with a steady track record of over three decades. Hence the fund house is considered good for investment. Investors can start a lump sum or SIP investment with the fund house and invest in the funds that best suit their investment objectives and requirements.
Which SIP is best in HDFC?
HDFC AMC offers mutual funds in equity, debt, and hybrid categories. Their fund offerings cover all investor needs and objectives. They have funds for short, medium, and long-term horizons. Moreover, they also offer tax-saving funds that help investors save tax. The fund house currently offers 38 equity funds, 111 debt funds and 29 hybrid funds. HDFC AMC is the most reputed and top-rated fund house in the country, with over INR 438,299 crore assets under management.
A SIP is recommended only for a long-term horizon of 5 plus years. And equity funds are considered the best choice for a long term horizon. However, it isn't easy to choose the best fund from the universe of funds the fund house offers. Investors have to choose the fund that offers good returns; at the same time, the fund also should fit the investor's investment objectives.
Scripbox is an investment platform that shortlists best funds based on multiple parameters like returns, investment horizon, expense ratio, etc. For HDFC AMC, Scripbox has shortlisted a few funds. One can see the top hdfc funds for SIP here.
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