Our SIP Calculator helps you see how much your monthly investments in mutual funds could grow over time. It's an easy-to-use tool to estimate your future wealth and plan for your financial goals.
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A Systematic Investment Plan (SIP) Calculator is a financial tool that helps you estimate the future value of your investments. Instead of investing a large lump sum, SIPs let you invest a fixed amount regularly (usually monthly) into mutual funds or other investment vehicles. This calculator shows you the potential maturity amount based on your monthly contribution, expected interest rate, and investment duration. It powerfully demonstrates the effect of compound interest on your money over time.
Our calculator uses the standard 'future value of an annuity' formula to estimate your returns. While the math can seem complex, here is a simple breakdown of the components:
M = P × [ (1 + r)n - 1 ] / r
Let's see the formula in action. Suppose you plan to invest:
Calculation:
r = (12% / 12) / 100 = 0.01
n = 10 years × 12 = 120 months
M = 500 × [ (1 + 0.01)120 - 1 ] / 0.01
M = 500 × [ (1.01)120 - 1 ] / 0.01
M = 500 × [ 3.30038 - 1 ] / 0.01
M = 500 × [ 2.30038 ] / 0.01
M = 500 × 230.038
M = $115,019 (approx)
In this scenario, your total investment would be $60,000 ($500 x 120), but thanks to the power of compounding, your estimated wealth gained is over $55,000.
This tool is essential for anyone looking to build wealth systematically. Here’s how you can use this mutual fund return calculator:
Choosing an 'Expected Annual Return' can be tricky. While past performance is not a guarantee of future returns, here are some common reference points for your SIP investment plan:
For long-term planning (10+ years), many investors use an estimate of 10-12% for equity-heavy SIPs, but it's wise to be conservative and align the rate with your risk tolerance.
A SIP involves investing a fixed amount regularly (e.g., monthly). A Lumpsum investment is when you invest a large, one-time amount. SIPs are great for averaging out your purchase cost (known as dollar-cost averaging) and are easier for most people to start, as they don't require a large initial capital.
No. This is a simple calculator to project potential growth. It does not factor in real-world costs like the mutual fund's 'expense ratio' (a small annual fee) or any 'exit loads' (a fee for redeeming too early). Your actual returns will be slightly lower after these fees are deducted by the fund house.
No. Investments in mutual funds, especially equity funds, are subject to market risks. The returns are not guaranteed and can fluctuate based on market performance. The 'Expected Annual Return' you enter is just an estimate to project potential outcomes, not a guarantee.
Yes, most mutual fund companies offer flexibility. You can often increase (or 'step-up') your SIP amount annually, pause your SIP, or stop it. This calculator assumes a fixed monthly investment for the entire period. If you plan to increase your SIP, you would need to calculate each step-up period separately.
Empower your financial journey by planning today. Use this tool to set your goals, and explore our other financial calculators to get a complete picture of your wealth-building potential.