Systematic Investment Plan Calculator

Investment Type

Investment Amount
0
1Cr
Rate of Interest
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20%
How long do you want to save ?
1
50
Invested Amount
0
Wealth Created
0
Interest Earn
0
Invested Amount
Wealth Created

Best SIP Plans 2020

The best SIP Plan helps in creating a planned approach towards investment. Here are some of the best SIP plans:

Fund NameReturn in 1 yearReturn in 3 yearsReturn in 5 years
Axis Long Term Equity Fund17.62%17.74%12.72%
DSP Tax Saver16.55%13.53%11.83%
Birla SL Equity Fund13.70%21.78%
Franklin India Equity Fund5.95%9.67%8.76%
ICICI Prudential Bluechip Fund9.8%12.43%9.75%
Motilal Oswal Long Term Equity Fund15.9%15.63%
Nippon India Tax Saver (ELSS) Fund3.67%4.01%5.16%
HDFC Equity Fund9.61%12.47%8.07%
DSP Equity Opportunities Fund15.24%12.88%11.07%
Aditya Birla Sun Life Pure Value Fund-8.59%3.52%6.14%
ICICI Prudential Value Discovery Fund0.15%7.06%7.28%

What is SIP and SIP Calculator?

  1. SIP- SIP is an abbreviation of a Systematic Investment Plan. It is an investment strategy to invest in a certain amount of money at regular intervals of time in a mutual fund scheme. It is a fixed amount of money is auto-debited from the bank account of the investors and is assigned several units, as per the present Net Asset Value (NAV). SIP investment plans are the smartest and most convenient way of investing in mutual funds.
  2. SIP Calculator- As the name suggests SIP calculator helps to calculate the wealth gain and the expected returns for the monthly SIP investment. User can get a rough estimate on the maturity amount for any monthly SIP Plan, based on the projected annual return rate.

Types of SIP

  1. Top-up SIP: In this type of SIPs the first installment is fixed, and the incremental amount and frequency of the increment are pre-decided. This leads to an automatic increase in the investment amount at regular intervals.
  2. Flexi Systematic Investment Plan: Here, whether you have chosen the monthly or daily, to pay different SIP amounts every time. This gives you, as the investor, a benefit of not being bound to pay a certain amount every month or daily but decide according to the cash flow at the time of SIP payment. Thus, in case you have a cash crunch you can skip the installment as per the requirement. However, it is also recommended not to do so unless you understand the market conditions and invest.
  3. Perpetual SIP: Under this type the paying SIPs without an end date. Not for a year, 3 or 5 years, but keep going till one wish. If you opt for this scheme, you have the option to redeem the fund at a time of your convenience.
  4. Trigger SIP: This SIP is for the ones that understand markets well, then this type of SIP gives you the option to use that knowledge. You can set a NAV or index level or event or a particular date to start the payments for this type of SIP. Trigger SIP encourages speculation and is therefore not preferred by many.

Features & Benefits of SIP

SIP is a method to build an investment portfolio with a small investment in the mutual funds at regular intervals. Many people choose this route to enter the financial markets and benefit from the compounding returns the best way. There are several features and benefits of SIP. Here are some, have a look at them:

  1. Rupee cost averaging: If you choose to invest in a fixed amount of money every month via SIP, you will see that more stocks are purchased when the price of the investment falls. This simultaneously brings down the average cost of buying a financial asset over time.
  2. Convenience: Investing in SIP is a simple and hassle-free process. You can instruct the bank to activate or facilitate you with the auto-debits from your bank account. As nowadays everyone is online, you can also visit the website of the fund house of your choice and click on the link for the SIP registration link or the tab.
  3. Disciplined Saving: To achieve anything in this world discipline is meant as an essence. By investing in SIP, you commit to saving regularly, and every investment takes you a step closer to reaching the financial objectives.
  4. Compounding: A small sum of money invested in SIP on a regular interval can grow into a considerably the big amount. Through the power of compounding, the interest earns interest, allowing you to fetch a substantial amount of earnings.
  5. No need to time the market: It can be a big dilemma for many to knowing when the right time is to invest in the market. As it is hard to predict that when the market will be at its peak or its low point. While SIP is not free from the market volatility.

How to use SIP Calculator?

SIP returns are calculated based on the compound interest. However, the SIP calculator may vary in functioning as it depends on the site you are using. Here are the generic steps of using a SIP calculator:

  1. Step 1: Enter the amount you want to invest.
  2. Step 2: Choose the number of years you are willing to continue the investment.

After providing this much information the SIP calculator will automatically calculate the amount of return.

What is SIP Advanced Calculator?

SIP Advanced Calculator is an upgraded version of the basic SIP calculator. It would calculate the return of post inflation. This shows a better picture of the maturity value considering inflation. Generally, it requires basic information like the monthly investment amount, investment tenure in years, expected the rate of return and the expected rate of inflation to arrive at the maturity value, pre and post inflation.

What is the need of SIP Calculator?

SIP calculator helps determine the monthly amount you need to save by investing in SIP to achieve a certain amount at an expected rate of return. You just need to input the desired lump sum amount, tenure you have in hand to achieve the same and the expected rate of return on the investment. It displays the total amount invested in the given time, the monthly amount needed to be invested and also the earnings on the investment.

Why Should you Invest In SIP?

The reasons for investing in SIP vary based on person to person. But here are the major reasons why people and you should also invest in SIP:

  1. Finance Future Goals: Futures goals like buying a house, child’s education, retirement plans, etc can be achieved with the help of SIP. You can build a corpus over a period by investing a monthly basis.
  2. Diversification: Almost every market expert encourages investors to have a diverse portfolio. In the same way, SIP can help you acquire the advantages of diversification even if you invest a small amount. The risk is divided as you invest in different holdings. In this way, you can make better gains.
  3. Minimizes Risk Factor: When you invest in the Equity Mutual funds through the SIPs, the risk factor minimizes and ride through the ups & downs of the equity market. This is because the investment is small and is spread over a period. Due to this, market timing is not something to be worried about.
  4. No Pressure of Market Timings: If one invests in a lump sum of amount, it is important to time it well. You can buy a large number of stocks but if you do not time the market well, then you the chances of losses increase. Such worries can be reduced by investing with SIPs as the amount invested is small.
  5. Disciplined Investing: SIP investments help you to build up a habit of investing regularly. It makes you more disciplined in terms of investing. When you start investing through SIP, a fixed amount gets deducted from the bank account each month.

Is SIP Safer than Lump-sum Investment?

The answer to this question may be different from person to person. As any investment is made based on the investment profile, and that includes the current income, expenditures, risk profile, and financial goals. Depending on your afford ability, you can choose to invest the way for the investment. SIP allows investing a fixed amount at regular intervals in a mutual fund scheme, typically an equity mutual fund scheme. On the other hand, a lump sum investment is of the entire amount at one go.

Here is the list of some reasons for choosing SIP over Lump-sum Investment:

  1. Rupee Cost Averaging: SIP allows for averaging an investment cost. The fundamental mantra behind rupee cost averaging is to get more units for a lower price. When markets fall, you get more units of the scheme. When markets rise you get fewer units for the same amount. In this way, your average cost per unit in the volatile markets turns out to be lower than when you invest in a lump-sum.
  2. Safer in volatile markets: With a SIP the risk from market volatilities is lower because your investment is averaged out. Whether the markets are high or low, your investments continue. Unlike a lump-sum investment, you don’t need to time the markets.
  3. Flexible Payments: You can customize the SIP investment based on the financial situation or affordability. So, let’s say you start with a small SIP in line with the income. As your income increases, you can choose to increase the SIP contribution. This increases the chances of achieving personal financial goals by accumulating greater wealth.

What is Inflation?

Inflation can be defined as the increase in the price of goods and services over a certain period due to the devaluation of the currency. Inflation is a problem when income does not increase along with the prices of the commodities, goods, as everyone’s purchasing power reduces, which can, in turn, lead to a slowing or stagnant economy. However, as long as things move in relative unison, inflation is not detrimental.

What is the current and expected Inflation rate?

India inflation rate rose by 4.62% in October 2019, the highest in over a year. India’s inflation rate averaged 5.98% from 2012 until 2019, reaching an all-time high of 12.17% in November of 2013 and a record low of 1.54% in June of 2017. The increase in inflation rate 2019 was largely due to more expensive food and beverages, which, as a category, account for over half of the weight of India’s consumer price basket. Economic analysts expect that consumer price inflation to average 4.0% in FY 2020.

FAQs

Q) How can the SIP investment calculator help in creating a huge corpus?

Ans) A SIP calculator helps in planning for the financial goals. It shows how much you need to invest in the SIPs every month and how much corpus that will generate. Knowing this kind of information in advance helps you to develop a perspective for long-term investments. Once you develop a mindset for a continuing SIP for the long term, it helps you create a huge corpus.

Q) How SIP calculator is different from the lump sum calculator?

Ans) A SIP calculator calculates the maturity amount of an investment made at regular intervals whether monthly, quarterly or a weekly basis. Whereas a lump sum calculator calculates the maturity amount of an investment made at one-time.

Q) Which are the best SIP calculators in India today?

Ans) Today almost every fund house or an investment portal offers you the SIP calculation tool. You can use any calculator tool as they run on the same formula and help you get the likely return rate of your investment.

Q) Can the SIP calculator be used for calculating return from all types of mutual funds?

Ans) Yes, the SIP calculator can be used for calculating returns from all types of mutual funds

Q) What is the SIP planner?

Ans) SIP planner is a tool just like a SIP calculator that helps an investor plan his SIP investments just in a matter of few seconds.

Q) In the SIP calculator, does the annual rate of return remain the same for all types of funds?

Ans) No, in the SIP calculator, the annual return rate does not remain the same for all types of funds. You will be required to check the annual return rate of the fund and then enter the rate manually.