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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.
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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
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
Upon entering the above details, the calculator computes the following values:
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.
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:
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
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:
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.
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.
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.
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.
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|
SBI is India’s second oldest mutual fund house following Unit Trust of India (UTI). SBIMF became India’s largest asset management firm in January 2020, with a total of INR 3.82 lakh crore in assets under management.
As SBI offers multiple schemes with different investment objectives, the best funds vary from category to category. Furthermore, shortlisting the best schemes requires an in-depth analysis and comparisons.
At Scripbox, its proprietary algorithm shortlists the funds based on various parameters. Scripbox algorithm recommends 2 to 4 funds for investment across asset classes such as small-cap, mid-cap, large-cap, diversified, liquid etc. When you invest in an objective, the algorithm suggests the appropriate asset class and funds.
One can view all the Scripbox recommended best mutual funds and the Scripbox recommended SBI mutual funds.
Systematic Investment Plans (SIPs) allow investors to regularly invest a fixed amount of money in mutual funds. SIPs have the potential to create long-term wealth through small and regular investments. SIP investing is simple and convenient. The entire process is automated, and the amount gets deducted from your bank account for purchasing the units. Through SIP investments, an individual gets the opportunity to invest across market cycles. One doesn’t have to worry about timing the market. Above all, SIP inculcates financial discipline among individuals. One can save regularly to attain all their financial goals.
Invest in the best mutual funds recommended by Scripbox that are algorithmically selected that best suit your needs.