SIP Calculator helps you calculate the return and expected future value of SIP investment.
SIP Calculator is an online tool to visualize the returns and future value of an SIP investment. It takes into account the SIP investment value, the expected return rate and the tenure that you want to stay invested for. It then presents a vibrant graph representing the final expected value of the SIP investment. Please note that the final future value can be very much different from the value calculated here. Mutual fund returns vary largely based on many factors including but not limited to markets, economy etc.
What is a SIP?
SIP(Systematic Investment Plan) is a way of investing into the mutual funds where one invests small amount of amount per month/quarter/half-yearly/yearly into the mutual fund schemes. So basically an individual invests into an SIP with small amounts at regular intervals rather than investing money in one go or lumpsum basis. SIP is specifically designed for risk averse investors to average out the market risks but still with a possibilty of generating superior returns.
Systematic Investment Plans(SIP) Features
- There is no return gurantee in SIP. Mutual fund investments are always subject to market risk.
- Scheme Duration: There is no specified duration in open ended funds. Closed ended funds open for a certain time only.
- You can open as many SIP accounts as you want.
- Minimum Deposit Amount: You can start from as small as ₹500. There is no upper limit
- Lock-in Period: No lock-in period. Exit loads may apply. Some funds like ELSS have 3 year lock-in period.
- Tax Saving: ELSS schemes provide ₹1.5Lacs exemption under 80c
- Tax Treatment: Principal in ELSS schemes is tax exempt. Returns are also exempt since they are long term capital gains
Benefits of SIP Account
- Easy to open and operate the account
It is very easy to open and operate a SIP account. SIP can be opened at any of the AMC website or at with many online players. This makes it very convenient for the end users to execute investments, redemptions, switch or other transactions.
- Tax Exempt ELSS funds
ELSS mutual funds offer an option for tax efficient 80 c investments. Investments made, principal and capital gains at maturity all 3 attract income tax exepmtions hence ELSS offers good investment option for tax saving.
Know more about ELSS mutual Funds here ELSS Guide
- Historically better returns
Equity Mutual Fund SIPs have historically given much better returns than any traditional plans.
- Options as per one's risk apetite
There are many types of mutual funds each of them carrying certain level of risk. You can see your profile and immediate financial risk and always match a mutual fund SIP suited to your risk profile.
- No long term committments
SIPs dont require any long term committments. You can start and end the SIP as and when you like. You just have to take care of Exit load and the taxation to the scheme.
- Best returns historically
Mutual Fund SIPs have given one of the best returns in the past 5-10 years. In generally, equities have given inflation beating returns over the long period of time.
- You can setup SIP for your kids
SIP can be setup on the name of your kids. The guardian can operate the account. This helps you meet the financial goals for raising up your children.
FAQs About Systematic Investment Plan(SIP)
- Which is better SIP or lumpsum?
This is the most frequent question that we get asked by the prospective investors. The answer to this is very relative and depands very much on your portfolio and the market timings in question. We have written quite some Text on it that you can go through. Quora Answer on Which is better, SIP or lumpsum
- How much should i invest in SIP ?
This completely depends upon the individual's goals and their saving capacity. You should always invest in SIPs only for meeting long term goals of life and should not shy away from exiting if the goal is met.
- ELSS Vs PPF , Where should I invest?
Traditionally PPF accounts have enjoyed higher interest rates than other long term instruments like Fixed deposits etc, ELSS or other equity mutual funds have given better returns historically but that comes with a certain risk attached. PPF is a no risk investment. You can read our post on PPF vs ELSS
- How many installments can i make in a year to a SIP?
You can setup SIP at the timings of your convenience i.e Monthly, quarterly, bi-yearly, annually. You can even skip a SIP installment or cancel it altogether if you want to.
How to calculate SIP returns and maturity amount ?
SIP returns and maturity completely depands on market factors. However, if you use our above SIP future value calculator, you can know the amount of money that you can have at the end of your SIP tenure assuming a given SIP return that you expect.