SIP Calculator
Do you know about the best and safest investment option Systematic Investment Plan (SIP)? If yes, then you will want to know how much return you will get in the future. So here is a SIP calculator informing you of the returns you will get for the next 40 years through graph and data-table.
| Year | Invested Amount | Future Value | Estimate Return |
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Frequently Asked Questions
What is SIP?
The full form of SIP is Systematic Investment Plan. It simply means that you invest a fixed amount every month in a specific mutual fund. This will give you a huge amount of money in the long run without the stock market and financial stress.
Now some stock brokers also offer SIP features in stocks like a mutual fund, although there are some limitations, that want to know first. We will know that later in our blog.
Who started the concept of SIP?
According to my research, the first option of a Systematic Investment Plan (SIP) was introduced by Franklin Templeton Mutual Fund in 1996 (According to salesforce) or 1993 (According to advisorkhoj.com) in India. However, before that, the way of investing in a specific time interval was not new. But it was not that easy.
Systematic Investment Plan (SIP) gives us the option to invest in a disciplined manner without any effort. This is its biggest plus point. Moreover, it completely defeats fear and greed, which are known to be the biggest enemies of an investor.
How is our SIP tool work?
Our SIP calculation tool calculates the future value based on 3 values. Which is the Monthly SIP amount, Investment year and Expected rate of return. Let's assume these values.
Monthly SIP amount: A
Investment year: Y
Expected rate of return: R
Now, we first calculate the ROI and the formula is…
ROI = (R ÷ 100) ÷ 12
Next, let’s convert months into years with the formula,
Months = Y x 12
Now we have got all the values to know the total SIP return. So finally, just use the below-given formula.
Total SIP Return = A x ((1 + ROI^{months } - 1) ÷ ROI ) x (1 + ROI)
Our SIP calculator gives you this calculation in milliseconds using all the same formulas.
What are the benefits of SIP investments?
The biggest advantage of SIP is that it averages the price without us knowing. Also gives the benefit of the Power of compounding. Apart from this, it also has other benefits like,
- Disciplined savings
- Rupee cost averaging
- Higher and stable returns
- Highly flexible
- Fast and secure online option
- Convenient and low initial investment
What are the types of SIP methods you can follow?
There are 6 main types of SIP that you can apply to your portfolio. However, all these options are not directly available in any application. You have to follow this by yourself.
1. Regular SIP: It is a simple type of method in which investors can invest a fixed amount at regular intervals.
2. Top-up SIP: The top-up SIP method is also called Step-up SIP which allows the investor to increase the SIP amount over time.
3. Flexible SIP: In this method, the SIP amount can be invested every month or alternate month. It can also be decided by the investor.
5. Trigger SIP: The trigger SIP method is most suitable for experienced investors who know when to invest in the market. You can withdraw or invest your money on a fixed date.
6. SIP with Insurance: In this type of method you have to invest in a mutual fund that provides insurance along with returns. If you are older then this may be a safe option for you.
How to maximize SIP returns?
There are so many tips to follow but may not work for you. So you have to follow the tips that work for you from some of the methods given below. And trial and error is the first method you should use.
- Start Early
- Diversify The Investments
- Remain Disciplined
- Review And Rebalance Portfolio In Specific Time
- Increase The SIP Amount Every Year
- Set a Long-Term Goal
- Avoid Withdrawing Early
- Use a Systematic Withdrawal Plan (SWP) To Withdraw the Amount
SIP vs Lump Sum investment: which is better?
Which one of these two options is better for you is up to you. If you are an experienced investor or you understand the market well, then you can achieve better returns by doing Lump Sum Investment, but if you are a beginner in the stock market, you can also suffer a huge loss. So generally, SIP is considered to be the best option for the beginner investor.
Is there a possibility of loss in SIP?
Definitely yes, but the chances are very less. A survey conducted by valueresearchonline.com in 2017 in which they analyzed 3.6 lakh monthly SIPs. The results indicated that if you invest in SIP for one year, the probability of loss is 22%. However, if you invest for 10 years, the chances of loss decrease to 0.3%, which is better than any other investment option.
The full form of SIP is Systematic Investment Plan. It simply means that you invest a fixed amount every month in a specific mutual fund. This will give you a huge amount of money in the long run without the stock market and financial stress.
Now some stock brokers also offer SIP features in stocks like a mutual fund, although there are some limitations, that want to know first. We will know that later in our blog.
According to my research, the first option of a Systematic Investment Plan (SIP) was introduced by Franklin Templeton Mutual Fund in 1996 (According to salesforce) or 1993 (According to advisorkhoj.com) in India. However, before that, the way of investing in a specific time interval was not new. But it was not that easy.
Systematic Investment Plan (SIP) gives us the option to invest in a disciplined manner without any effort. This is its biggest plus point. Moreover, it completely defeats fear and greed, which are known to be the biggest enemies of an investor.
Our SIP calculation tool calculates the future value based on 3 values. Which is the Monthly SIP amount, Investment year and Expected rate of return. Let's assume these values.
Monthly SIP amount: A
Investment year: Y
Expected rate of return: R
Now, we first calculate the ROI and the formula is…
ROI = (R ÷ 100) ÷ 12
Next, let’s convert months into years with the formula,
Months = Y x 12
Now we have got all the values to know the total SIP return. So finally, just use the below-given formula.
Total SIP Return = A x ((1 + ROI^{months } - 1) ÷ ROI ) x (1 + ROI)
Our SIP calculator gives you this calculation in milliseconds using all the same formulas.
The biggest advantage of SIP is that it averages the price without us knowing. Also gives the benefit of the Power of compounding. Apart from this, it also has other benefits like,
- Disciplined savings
- Rupee cost averaging
- Higher and stable returns
- Highly flexible
- Fast and secure online option
- Convenient and low initial investment
There are 6 main types of SIP that you can apply to your portfolio. However, all these options are not directly available in any application. You have to follow this by yourself.
1. Regular SIP: It is a simple type of method in which investors can invest a fixed amount at regular intervals.
2. Top-up SIP: The top-up SIP method is also called Step-up SIP which allows the investor to increase the SIP amount over time.
3. Flexible SIP: In this method, the SIP amount can be invested every month or alternate month. It can also be decided by the investor.
5. Trigger SIP: The trigger SIP method is most suitable for experienced investors who know when to invest in the market. You can withdraw or invest your money on a fixed date.
6. SIP with Insurance: In this type of method you have to invest in a mutual fund that provides insurance along with returns. If you are older then this may be a safe option for you.
There are so many tips to follow but may not work for you. So you have to follow the tips that work for you from some of the methods given below. And trial and error is the first method you should use.
- Start Early
- Diversify The Investments
- Remain Disciplined
- Review And Rebalance Portfolio In Specific Time
- Increase The SIP Amount Every Year
- Set a Long-Term Goal
- Avoid Withdrawing Early
- Use a Systematic Withdrawal Plan (SWP) To Withdraw the Amount
Which one of these two options is better for you is up to you. If you are an experienced investor or you understand the market well, then you can achieve better returns by doing Lump Sum Investment, but if you are a beginner in the stock market, you can also suffer a huge loss. So generally, SIP is considered to be the best option for the beginner investor.
Definitely yes, but the chances are very less. A survey conducted by valueresearchonline.com in 2017 in which they analyzed 3.6 lakh monthly SIPs. The results indicated that if you invest in SIP for one year, the probability of loss is 22%. However, if you invest for 10 years, the chances of loss decrease to 0.3%, which is better than any other investment option.
Stop guessing and start calculating.
Disclaimer: The financial blogs and tools provided on this website are for informational purposes only. We do not constitute financial advice, and the accuracy or completeness of the information cannot be guaranteed. Users are encouraged to conduct their own research and seek professional financial advice before making any investment decisions.