SIP Calculator – Calculate Returns for Mutual Funds SIP Investment


Parameters used in a SIP Calculator

1: Investment amount per month?

A: This is the amount that will be invested every month. For example: If a SIP of ₹ 5,000 per month is set, then the calculator will assume that every month a total of ₹ 5,000 will be invested in the given mutual fund(s).

2: The Total Number of Payments?

A: This is known as the tenure for the mutual fund SIP; the total number of payments you are planning to invest in a SIP. For example: If you are choosing 24 payments it means you are investing a certain amount for 2 years every month.

3: Expected annual return?

A: Annual returns are the return that is expecting from the investment on yearly basis. However, it’s not possible to know the exact return, but as a reference, the historical returns percentage can be used. The number can be fluctuated just to check the total value in the different scenarios. For the benchmark – a fixed deposit would give annual returns of 6.5%*.

About Systematic Investment Plans (SIPs)

Systematic Investment Plan, commonly known as a SIP, is a disciplined investment strategy that helps in building your wealth over a long-time period. It is an economical way of investing a fixed amount for a continuous period in a mutual fund at regular intervals. Mainly it helps you in two ways. Here:

1: Rupee Cost Averaging: Rupee cost averaging is an approach wherein you invest a fixed amount at regular intervals. This ensures that you buy more shares of an investment when the prices are low and vice-versa.

2: Compounding: Compounding refers to the increasing value of an asset due to the interest earned on both accumulated interest and a principal. This phenomenon is also known as compound interest and it works on both assets and liabilities.

NOTE: Kindly note that any amount in future will be of less value as inflation would act upon regarding the same.

Mutual fund investments are subject to market risks, read all scheme documents carefully.

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