SIP Calculator

# Mutual Fund SIP Calculator

## Calculate your return on investment when you Invest via SIP using this calculator.

A Systematic Investment Plan (SIP) helps you to make small investments in mutual funds at regular intervals that can grow your money in the smartest way possible.

Tell us how much you can start with investing (it can be as low as Rs.1000 per month) and we will tell you, based on our SIP return calculator, how much your money would have grown.

Monthly (SIP)
Target Amount
Please enter investment period less than 30 years.
Enter rate less than 30%
STEP UP(%)
SIP investments, except tax saving SIPs, can be increased by step up percentage every year. Stepping up helps to achieve targets faster . It should, generally, be equal to the average annual pay hike. 10% is suggested.

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## MATURITY VALUE

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### What is Systematic Investment Plan (SIP)

A SIP is a systematic investment plan wherein a certain fixed amount of money is deducted towards the investment in mutual funds periodically (weekly, monthly, or quarterly).

SIP’s provides the most disciplined approach towards making an investment along with offering various benefits.

Suppose you have decided to invest in a mutual fund through SIP. All you need to do is get your KYC done along with certain other formalities and you can start investing.

Once you have decided to invest, say monthly, an amount of Rs. 10,000, it will automatically deduct the amount from your bank account and invest in the selected mutual fund.

### What is SIP Calculator?

If you want to estimate the returns that will be made by you through investment via SIP, a SIP return calculator can help you to do the same.

SIP return calculator works on the data inputs provided by you to estimate the returns. For example, it would ask for your investment horizon, the maximum amount that you can invest after meeting all your expenditures, etc.

Based on the data entered by you, mutual fund SIP calculator will help you in estimating the returns showing you the wealth gained on your investment and the maturity amount.

However, it is to be noted here that the return is just an estimation and does not assure you of fixed returns. Actual returns might vary depending on the performance of the mutual fund. It can be either higher or lower than the estimated return based on the current performance of the fund.

### How Does SIP Return Calculator Work?

SIP returns are calculated as per the compound interest and number of times compounding is applicable. You can enter the monthly amount you want to invest, the number of years you want to stay invested and the expected rate of earnings on the SIP. Our SIP calculator online will automatically calculate the maturity amount and wealth to be gained out of the investment.

You can also choose to enter the target amount matching your financial goal and reverse calculate the monthly amount to be invested given tenure and rate of growth.

### How is SIP return calculated?

There are various ways to calculate return on SIP like absolute return, annualized return, CAGR, XIRR.

CAGR or Compounded Annual Growth Rate is considered as the most common and effective way to calculate the SIP returns if your investment horizon is more than a year.

Let’s understand the same with the help of a example:

The formula for CAGR is shown below

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

• Ending value of the investment made
• Beginning Value of the investment made
• Number of years or months of the investment

The following details are needed to calculate mutual fund returns through the CAGR formula

1. The NAV at which the investment was made
2. The NAV at the end of the investment period
3. The investment period

Let us understand the concept better with the help of an example:

Suppose you have invested Rs. 1,00,000 in a mutual fund 2 years back when the NAV was Rs. 50. Over the years, the fund has grown and the current NAV stands at Rs. 60.Here’s how CAGR formula will work to calculate the returns in this case:

CAGR = (ending value/beginning value)^(1/number of years)-1*100

Putting values in the above formula:

(60/50)^(½)*100 = 9.54%

The above can be calculated by considering the holding period in a number of months as well. Below is the formula we can use for that:

CAGR = (ending value/beginning value)^(12/number of months)-1*100

(60/50)^(12/24)*100 = 9.54%

## How to use Scripbox’s Systematic Investment Plan Calculator?

Scripbox SIP return calculator is available on our website. Follow the below-listed steps to get the maturity amount and estimated wealth gain

• Visit website.
• Select the type of investment type. You can choose between the two approaches.

Monthly SIP approach

• If you know the monthly SIP amount you are ready to invest, select ‘Monthly SIP’ approach
• Enter the monthly SIP investment amount
• Enter the investment period in years
• Enter the expected growth rate (%)
• Enter the step-up %. SIP investment can be increased every year by step-up %. This helps you achieve your financial goals faster and systematically. This step-up % is generally equal to the raise in your annual pay.

You will be provided with the wealth gained and maturity value

Target Amount approach

• If you have already decided the financial objective and the target amount you want to achieve at the end of the tenure, select ‘Target Amount’ approach
• Once you have decided your approach, enter the target amount you have in mind to achieve from this investment
• Enter the investment period in years
• Enter the expected growth rate (%)
• Enter the step-up %. SIP investment can be increased every year by step-up %. This helps you achieve your financial goals faster and systematically. This step-up % is generally equal to the raise in your annual pay.

You will be provided with the initial amount to be invested, the wealth you will gain.

You can also refer to the ‘SIP Investment Chart’. This chart provides a visualization of the maturity amount over the tenure of investment. It is a ready tool to understand the year in which the wealth gained is higher.

### What are the Advantages of SIP Calculator?

SIP calculator or mutual fund investment calculator provides the following advantages:

• It allows the investor to get an estimate of the total wealth gain on the investment and the maturity amount at the end of the SIP tenure.
• Individuals will be able to manage their finances better once they have an estimated idea of their investment.
• It saves time for the manual calculation to be made by the investor and also helps in avoiding errors.
• It helps you to evaluate the returns in different scenarios.

## Frequently Asked Questions on Mutual Fund SIP Calculator?

### What is the meaning of SIP?

Systematic Investment Plan (SIP) is one of the ways of investing in mutual funds. It allows the investor the flexibility of choosing the amount that has to be invested along with the duration, say weekly, monthly, or quarterly. It also allows the investor to cancel or pause their SIP for a particular period.

### What are the minimum and maximum tenures of a SIP?

There is no minimum tenure of SIP plan, except for ELSS funds, which are tax-saving instruments in nature, which have a lock-in of 3 years from each date of the investment.

The invested amount can be withdrawn either partially or in full at any point in time. However, most fund houses charge an exit-load of 1% if the redemption is made before 1 year of completion.

There is no maximum tenure of a SIP as well. You can keep your SIP active and be invested for a longer period for higher returns.

### What are the type of SIP’s available?

Below is the type of SIP’s available in the market as of now:

1. Top-up SIP: In this, the investor, who has enrolled for SIP, has the option to increase the SIP installment amount by a fixed amount at predefined intervals.
2. Perpetual SIP: Perpetual SIP does not have any fixed investment period and they continue to exist till perpetuity unless they are canceled by the investor. It is advisable for long-term investors.
3. Flexi SIP: In Flexi SIP, the investor can change the investment amount on the basis of a pre-decided formula. An investor can invest a lower amount when markets are high and a higher amount when markets are low.
4. Trigger SIP: A trigger SIP facility in a mutual fund allows investors to redeem part or full amount or switch investment to another scheme automatically when it reaches a pre-defined trigger point.

### Is SIP safer than lump-sum investment?

Mutual funds are subject to market fluctuations. You can choose to invest a lump sum amount if you have received a lump sum amount and would like to invest in mutual funds and if you are also well aware of the market and the historical trend of the mutual fund scheme.

The SIP option provides you with the flexibility to change the intervals and amount, later during the course of the investment. With a lump sum, you invest one time and this big amount generates returns from day 1.

While investing through SIP mode can offer the investor higher returns, there is no assurance of fixed returns as there is always a market risk involved.

### Is SIP a mutual fund?

No, SIP is a mode of investment in mutual funds. SIP allows an investor to invest regularly a fixed amount weekly, monthly or quarterly. This helps to build a routine of savings in a disciplined manner in an investor

### Can I start SIP online?

Yes, investors are allowed to initiate a SIP online. However, investors should complete their KYC verification prior to investing in mutual funds.

You can start investing in SIP through Scripbox. Just login to our website, complete your KYC, set your financial goals and the best-suited personalized SIP mutual fund scheme will be recommended.

### Is SIP tax-free?

Not all SIP’s are tax-free. Only investments in ELSS funds are eligible for tax benefits up to 1.5L under section 80C of the Income-tax act.

### Is Investing in SIP a good idea?

Investment through SIP offers a disciplined approach to manage your finances. If you are looking for a long-term investment in mutual funds, SIP would prove beneficial.

### What are the best fund schemes to invest in SIP?

The best SIP funds to invest in 2020 are:

### What are the differences and benefits of SIP vs. mutual funds?

Many times investors get confused between the SIP plan and mutual fund and might consider both to be the same. This is not the case, there are few fundamental differences between SIP and mutual funds.

Here an investor must realize that SIP plan is a mode or rather a disciplined approach towards saving and investing

Let us look at the difference in detail.

Mutual Fund

Mutual funds are investment instruments wherein an investor can choose to either invest in an equity-oriented fund, debt-oriented fund, mix of equity and debt or liquid fund. As selected by an investor the amount invested is pooled together and invested accordingly by making a portfolio of assets.

The returns depend on the performance of the underlying assets and the market condition and fluctuations. The pool of assets created and managed by professional fund managers in exchange for a fund management fee.

SIP

SIP, on the other hand, is a method of investing. SIP is not an investment product, investment option or an investment in itself. It is a systematic and planned manner of disciplined and small saving and investing. Just like an investor would save an amount of money in a savings bank account or recurring deposit, he saves an amount.

SIP plan is an effective investment in financial instruments like mutual funds, debt funds based on the financial goals and how much an investor wants to save or invest every period.

Hence, an investor can either invest through SIP or lumpsum mode of investing. Let us spot the difference between SIP and lumpsum mode of investment.

Feature SIP Lumpsum
Outflow of amount invested Regular, periodic and fixed amount One-time investment
Cost of fund management Lesser due to rupee cost averaging Higher due to rupee cost averaging
Flexibility High Low
Volatility Low High

### How important is the date for a SIP investment?

The date of investment plays an important role as the units of the funds will be purchased at the price prevalent on the day of investment. The NAV is high, the units allocated will be lower and if the NAV is low the units allocated will be higher. At the time of the sale of these units, the higher the number of units the higher will be the wealth created.

Hence, the date of investment is crucial but if the investment is being made for a long term period say 7 years or more, there will be a very marginal difference and at the maturity or redemption of funds the difference in wealth creation would be of a lesser value

What’s more important here is to keep investing regularly. Investing before the 10th day of every month is mostly considered a good option. By then you would have your monthly inflow of income and outcome of fixed living expenses and you can easily invest from the remaining amount.

However, if you want to invest at the end of the month ensure you are left with enough to invest. To ensure a disciplined approach and avoid misses in the installments, you can open a separate bank account and avoid scarcity of funds when your SIP is due

### Is it possible to change or cancel a SIP investment at any time?

Yes, it is possible to pause, change instructions or cancel a SIP investment. The details for each scenario is mentioned below:

1. Pause
2. The AMCs provide an investor with an option to pause his/ her periodic investment for a period of up to 3 months. An investor will have to intimate the AMC in writing by submitting a form mentioning the starting period of the pause and the ending period of the pause, folio number, and other account details, as required

3. Modify
4. The AMCs provide every investor an option to modify the instruction. An investor needs to provide the AMC an instruction for modification of the SIP instructions and fill a SIP modification form and submit it to the nearest ISC or AMC office. The old and new instructions must be mentioned very clearly.

An investor can modify the instruction on the following scenarios.

1. Increase or decrease the installment amount
2. Frequency of the installment
3. Change of the scheme with the fund house
5. Stop or cancel the SIP
6. An investor can choose to stop the installments for a period of time or cancel the entire SIP itself. In both cases, an investor must provide written instruction to the AMC.

If the bank account which is linked to SIP is not funded for more than 4 to 5 installments, the AMC will stop the SIP after giving multiple reminders to the investor

### How to invest in SIP?

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.