# SIP Calculator

A Systematic Investment Plan (SIP) calculator is free online tool that helps your returns by investing in a specific plan.

Monthly Investment

500

1 Lakh

Expected Return (P.A)

%

1%

20%

Period

Yr

1Y

30Y

Invested

₹0

Estimated Returns

₹0

Growth

%

5 Years Value

₹0

0

Invested

Returns

While investing in mutual funds, many prefer SIPs or Systematic Investment Plans. By definition, market-linked financial products cannot offer assured returns. Still, first-time mutual fund investors would want to get an estimate of what they can expect from their SIP investments. Our SIP calculator can be of help here. In this article, we will explain how the tool can be valuable for you to plan your investments for a specific period.

## SIP Calculator Explained

As seen above, an SIP calculator can give you an estimate of the returns made via SIPs. Like any other calculator, you need to input data such as the investment amount, tenure, and the expected rate of return and it will give you an estimation of the return you can expect.

However, remember that it is only an estimation. The returns provided by the SIP calculator can differ from the actuals as market conditions determine the actual returns.

## The functioning of SIP calculators

Essentially, SIP calculators automatically process the data you feed in to give you approximate returns from your investment over a given tenure.

But if you are curious, an SIP calculator works on the formula below.

M = P × ({[1 + i]^n – 1} / i) × (1 + i)

In the formula above,

M = the amount received upon maturity.

P = the amount invested at regular intervals.

n = the number of payments made.

i = the periodic rate of interest.

## Using the SIP calculator can be beneficial in many ways

Investors can benefit from using an SIP calculator in various ways.

• Easily accessible, easy to use:

To access the calculator, users don’t have to create an account or sign up on any website. They are readily available on several financial platforms. Furthermore, the SIP interest calculator is easy to use and the user just needs to input the correct investment details like amount, interest, and duration.

• Financial planning:

All financial tools help you do financial planning. While investors can plan their finances themselves, the SIP calculator makes the task easier. The calculator allows users to try out different options and gives them indicative potential returns.

• Provides estimated returns:

Analyzing historical data, the SIP calculator provides investors with estimated returns. This gives them a realistic picture.

## Some hidden uses of the SIP return calculator

Prima facie, the SIP return calculator looks like a simple tool that can estimate returns on investments made through SIPs. However, there is so much more the calculator offers. SIP is one of the best modes of investing in a mutual fund and the SIP return calculator encourages investing through SIPs.

The calculator also allows real-time investment in mutual funds without actually investing money by letting investors use the calculator for speculative scenarios. This helps them assess risks, especially investors who are new to mutual funds. Furthermore, the calculator eliminates the possibility of miscomputation that could happen with manual calculation.

## Conclusion

The SIP calculator is a must-use tool for anyone interested in investing in mutual funds via SIPs. The calculator ensures that your investment plans are aligned with your financial situation. However, remember that the SIP calculator only gives an estimated return, not the exact return.

## FAQs

1.What is the minimum amount I can invest in an SIP?

SIP investments do not come with an upper limit. However, SIPs have a lower limit of ₹500.

2.How long can I stay invested in an SIP?

SIPs are ideally long-term investments, so the maximum tenure of an SIP can stretch from a few months to years depending on the investor.

3.Can I modify my SIP amount?

Yes, you can modify your SIP amount. Most mutual fund companies offer investors the option to increase or decrease the investment amount.

4.Are SIPs limited to equity mutual funds?

No, SIPs are not limited to equity mutual funds. Investors can use the SIP route to invest in debt funds, hybrid funds, and other mutual funds.

5.What are the different types of SIPs?

SIPs are generally categorized into five types – regular SIP, flexible SIP, top-up SIP, trigger SIP, and perpetual SIP.

6.Can I renew an SIP?

Yes, you can renew an SIP once it matures.

7.Can I pause my investments in an SIP?

Yes, you can pause investments in a SIP. However, the specific mutual fund house will have a say on the duration of the pause.