SIP Calculator

Add more to your wealth with SIP Investments
 

SIP Calculator FAQs

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1. What is an SIP?

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A Systematic Investment Plan, also known as SIP, is a unique investment method where you regularly make investments of a fixed amount in an asset over a specific period of time. With an SIP, you have the freedom to choose all the following aspects -

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•  The asset class in which you wish to invest in
•  The amount of investment that you’re willing to make
•  The tenure of investment

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Stocks, equity mutual funds, debt mutual funds, hybrid mutual funds, and ETFs are some of the asset classes that you can invest in via an SIP. By investing a fixed amount regularly in a market-linked asset class for a long time, Systematic Investment Plans can effectively curb the effect of market volatility.

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The ability to neutralise market volatility over the long term makes SIPs one of the best ways to invest in the stock market. Through the advantage of rupee cost averaging, an SIP can also keep the overall cost of your investment low, thereby increasing the chance of earning higher net returns.

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2. What is an SIP calculator?

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An SIP calculator is a unique online tool that’s designed to help you get an estimate of the returns that you’re likely to earn from your SIP investment. To use this online calculator, you only need to enter a few basic details related to your investment, such as -

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•  The target amount that you wish to get at maturity
•  The expected rate of return
•  The tenure of the SIP

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Once you enter these details, the tool immediately displays the profits that your Systematic Investment Plan will generate on maturity. In addition to this, the calculator also shows you the total principal amount of investment and the amount of monthly investment needed to reach the target amount.

That said, keep in mind that an SIP calculator only gives you an estimate of the returns on your investment. The exact returns that you get on your investment may vary depending on the actual performance of the market.

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3. How can an SIP return calculator help you?

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An SIP return calculator is one of the most helpful tools for an investor. It helps you quickly and accurately determine the amount of return that you’re likely to get from your SIP investments. In addition to that, the tool also gives you information on how much you would need to invest periodically to reach your target financial goal.

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By giving you these two crucial pieces of information, an SIP return calculator can help you plan your investments in a more efficient manner. That’s not all. Since the tool is free to use, you can also tweak the values as many times as you need to. This helps you find out the ideal investment amount and tenure for achieving your financial goal.

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An SIP return calculator also helps you save time, effort and energy by eliminating the need to calculate the returns manually by yourself. With the help of this online calculator, you can make informed investment decisions that are in line with your financial goals.

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4. How do SIP calculators work?

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You can find two different kinds of SIP calculators online. The first type of calculator requires you to enter the following parameters -

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•  The amount of periodic investment that you wish to make
•  The tenure of the SIP
•  The expected rate of return on your investment

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Once you enter these details, the calculator works on the backend and displays the amount of return that you’re likely to get on the investment. Additionally, it also shows you the final amount that you will earn at maturity (which includes the principal investment and the returns earned thereon).

The second kind of SIP calculator works in a similar fashion. However, the parameters you need to enter are different, as follows -

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•  The target amount that you wish to get upon maturity
•  The tenure of the SIP
•  The expected rate of return on your investment

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Upon entering these details, the calculator instantly displays the estimated amount of profits that you’re likely to get on your investment. In addition to this, the calculator also shows you just how much you need to invest monthly via your SIP to reach your target goal on maturity.

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5. What are the advantages of an SIP calculator?

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An SIP calculator is a super useful tool that comes with plenty of benefits. Here’s a quick look at a few of them.

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•  It’s easy and free to use

Using an SIP calculator is very easy. All you need to do is enter a few details like the target amount that you wish to get on maturity, the tenure of the SIP and the expected rate of return. Furthermore, the calculator is completely free to use as well. So, you can use it as many times as you need to in order to make an informed investment decision.

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•  It helps you plan your investments better

The SIP calculator is designed to give you an insight into the amount of monthly contribution you need to make to achieve your target amount at maturity. Additionally, it also displays the amount of profit that you’re likely to generate during the SIP’s tenure. Using this information, you can plan your investments in a way that’s aligned with your financial goals.

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•  It provides accurate and instant results

Since an SIP calculator is automated, the results that you get from it are highly accurate and free from computational errors. Also, the tool is super-fast and takes only a couple of seconds to display the results. This is not the case with manual calculations, which are prone to errors and extremely time-consuming.

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6. Can I modify my SIP amount?

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Yes. Most mutual funds allow you to either increase or decrease the amount of SIP investment that you make each month. However, before you invest in an asset via a mutual fund house, check the terms and conditions of the SIP.

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7. Does an SIP only allow equity mutual fund investments?

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No. In addition to investing in equity mutual funds, you can also invest in individual stocks, hybrid mutual funds, debt mutual funds and exchange traded funds (ETFs) through an SIP.

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8. What are the types of SIPs available?

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Systematic Investment Plans can be categorised into the following types— regular SIPs, flexible SIPs, perpetual SIPs, step-up SIPs, trigger SIPs and multi SIPs.

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9. Can I renew an SIP?

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Yes. You can choose to renew an SIP by placing a renewal request 30 days before the maturity. Many mutual fund houses even offer an auto renewal feature. When you enable this feature, your SIP is automatically renewed at the end of the original investment tenure.

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10. Can I pause my investments in an SIP?

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Yes. You can temporarily pause your SIP investments at any point in time. However, it is advisable to use this option only when it is absolutely necessary and you lack the funds to continue with your investment plan.

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11. What is the difference between SIPs and mutual funds?

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A Systematic Investment Plan (SIP) is an investment method where you can invest a fixed amount in an asset regularly over a specific period of time. Mutual funds, on the other hand, are investment vehicles that pool funds from multiple investors and invest those funds in a basket of different stocks.

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12. How much can one invest in SIP?

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The minimum amount that you can invest in SIP is Rs 500/-, but there is no upper-limit to your investments.

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13. What is the maximum tenure of SIP?

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There is no maximum tenure on SIP investments. You can invest for as long as you wish to invest. Although, the minimum tenure of investment is 3 years.

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14. Is SIP as same as Mutual Funds?

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SIP investment can be done in Mutual Funds. SIP is not an investment, but an investment type. It is an investment channel through which you invest in a fund/scheme of your choice in regular intervals.

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15. What are the benefits of investing through SIP?

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Investing through SIP has many benefits such as:

1. You can invest in any fund, an amount of your choice.

2. You can renew or close your SIP anytime, online.

3. You can pause your SIPs anytime, online.

4. You can modify or alter the amount of investment anytime, online.

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16. What is SIP Set-up?

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When investors sign up for a systematic investment plan or SIP, which is a way to invest in a mutual fund, this has to be set up before the investment kicks into operation. Setting up a SIP involves the investor handing over their details including KYC, application forms and whatever other information is mandatorily required by an AMC, bank or brokerage to set up a SIP investment.

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17. How to set-up SIP?

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You can set up a SIP through your AMC, bank or brokerage and any mutual fund house, online and offline. By submitting documents requested (mandated by the Securities and Exchange Board of India), you may set up your SIP. If you are doing this physically, you will have to go and submit KYC documents and applications to the institution where your SIP is started, or you can upload documents of the AMC, fund house or brokerage online.

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18. Is it necessary to set-up a SIP?

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It is mandatory to submit certain documents like your proof of identity and address to set up a SIP. Regulations for setting up a SIP have been made mandatory by SEBI (Securities and Exchange Board of India). A KYC procedure also has to be completed for all investments, as mandated by SEBI. Apart from this, in case you change the amount of an investment in a SIP, this involves a new set up process.

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