SIP investment has been a prominent choice for investors these days who want to grow their wealth in the long term. It helps investors to make disciplined savings; it is affordable and has the potential to create wealth. But how can you determine how much return your SIP would yield in the long run? If you are unsure how to determine your returns, the SIP Calculator will make it possible for you to analyze.
Moreover, investors can get in touch with us at 9810325138 to create a future with financial freedom.
What is an SIP Calculator?
The SIP calculator is a virtual calculator to calculates the investment amount, duration, and rate of returns to analyze the future value of the SIP investment. Then you can consider how you can grow your wealth and how the power of compounding increases according to your financial objectives.
Why Use an SIP Calculator?
Easy to Use
With just a few inputs, you can instantly calculate your potential returns.
Future Planning
It helps in financial planning by giving you a clear idea of how much wealth you can accumulate over a specific period.
Adjust Goals
You can adjust the inputs (like the investment amount or tenure) to fit your financial objectives.
Read More:- How To Open A Demat Account?
Key Inputs for SIP Calculator
Monthly Investment Amount:
Your monthly investment amount that you intend to make in the SIP.
Investment Period:
The timeframe that you intend to keep up your SIP.
Expected Rate of Return:
The expected rate of return represents the percentage of returns one can expect while investing in mutual funds. As the past performance does not indicate future returns, however, the equity mutual funds give average returns of 10-12%.
How to Calculate Returns Using an SIP Calculator?
Calculating returns using the SIP calculator is a straightforward process.
Monthly SIP Amount: The monthly amount that you invest
Time Period: It is the time horizon for which you want to keep investing, such as 5, 10, or 20 years.
Expected Return Rate: the rate of return estimated for every year.
The SIP calculator uses the formula of compound interest to calculate the value of your future investment.
For Example: Investing ₹5,000 per month for the duration of 10 years at expected annual returns of 12%.
Formula Used by SIP Calculators
SIP calculators employ the following formula:
M = P × [(1 + i)^n – 1] × (1 + i) / i
Where:
M = Maturity Amount
P = SIP Amount
i = Expected Rate of Return divided by 12 (for monthly calculation)
n = Number of months
Example of SIP Returns Calculation
Let's say this is the case:
Monthly SIP: ₹10,000
Investment Period: 10 years
Expected Return Rate: 12% annually
According to a SIP calculator, an investment of ₹12 lakhs over ten years would yield estimated returns of about ₹23 lakhs.
Benefits of Using an SIP Calculator
Clarity on Growth: By using the SIP calculator, you will be able to see the accumulation of wealth over time.
Comparison Tool: You can easily compare investment plans or investment periods and choose the best option according to your financial objective.
Time-Saving: the SIP calculator is an efficient tool. you can quickly calculate the returns and it will save a lot of your time.
Final Thoughts!
Every mutual fund investor should have a SIP Calculator to help with better investment planning and return estimation. The calculator makes it efficient for investors to make smart financial decisions that will help them contribute to long-term wealth creation with possible returns.
Investors can contact us at 9810325138 to know more or use the SIP calculator by Sanjhi Poonji App by RKFS to create a future with financial freedom.
Related Post:- How To Find Best Mutual Funds for SIP?
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