SIP CALCULATOR
| Duration | SIP Amount ($) | Future Value ($) |
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📈 SIP Calculator: Plan Your Wealth with Smart Monthly Investments
A SIP Calculator helps you estimate the future value of your mutual fund investments made through Systematic Investment Plans (SIPs). It shows how your small monthly contributions can grow into a large corpus over time, thanks to the power of compounding.
📌The Formula to Calculate SIP Calculation :
SIP returns are calculated using the compound interest formula adjusted for recurring monthly investments:
FV = P × [(1 + r)^n – 1] × (1 + r) / r
Where:
FV = Future Value of the investment
P = SIP amount (monthly investment)
r = Monthly rate of return (annual rate ÷ 12 ÷ 100)
n = Total number of payments (months)
This formula helps you see how your investment grows over time with consistent monthly contributions.
🧑🏫 How to Use the SIP Calculator?
Using the SIP calculator is simple and beginner-friendly:
Enter your monthly SIP amount.
Select the expected annual return rate (typically 10–15% for mutual funds).
Choose your investment duration in years.
Click “Calculate” to instantly see your total investment, estimated return, and future value.
This allows you to set realistic financial goals and track how much you need to invest each month.
✅ Benefits of Using a SIP Calculator
- Encourages consistent savings and disciplined investing.
- Helps in goal-based financial planning.
- Shows the benefit of compounding on monthly investments.
- Allows comparison between different durations and return rates.
- Motivates early investment habits with clear future projections.
📉 Factors That Affect SIP Returns
Several key factors influence how much wealth your SIPs generate:
Monthly Investment Amount: Higher SIPs lead to larger future value.
Investment Tenure: Longer the duration, more the compounding benefit.
Expected Return Rate: Higher returns = faster portfolio growth.
Market Volatility: SIPs work well in volatile markets by averaging the cost.
Consistency: Regular, uninterrupted SIPs lead to better results.
❓ Frequently Asked Questions (FAQs)
What is a SIP?
A SIP (Systematic Investment Plan) allows you to invest a fixed amount in mutual funds every month, helping you build wealth gradually over time.
How accurate is the SIP calculator?
The calculator gives you a close estimate based on assumed annual return rates. Actual returns may vary depending on mutual fund performance and market conditions.
Can I change my SIP amount later?
Yes, you can increase, decrease, or pause your SIP at any time based on your financial situation or investment goals
Do SIP returns include dividends?
Most SIP calculators show the growth of NAV (Net Asset Value). If you choose a “growth” plan, returns are reinvested; if it’s a “dividend” plan, payouts are separate.
Can I use a SIP calculator for tax-saving investments?
Yes, you can use the calculator to estimate returns from SIPs in ELSS (Equity-Linked Saving Schemes), which offer tax benefits under Section 80C.