An SIP Calculator is a tool that helps you estimate the potential returns on your investment in a Systematic Investment Plan (SIP). SIPs are a popular way to invest in mutual funds, allowing you to invest a fixed amount of money regularly, typically monthly.

The calculator works by considering several factors you input, including:

• Monthly SIP amount: This is the fixed amount you plan to invest in the mutual fund each month.
• Investment tenure: This is the total period for which you plan to continue your SIP investment.
• Expected rate of return: This is the annualized return you anticipate from the mutual fund investment. It’s important to remember that this is an estimated value, and actual returns may vary.

Based on these inputs, the SIP calculator uses a formula to calculate two key values:

• Future value: This is the total amount you can expect to have accumulated at the end of your investment tenure, including your principal investment and the returns earned on it.
• Maturity amount: This is the total amount you will receive, which includes the future value and any additional charges or fees, like exit loads.

Here are some key points to remember about SIP calculators:

• They are estimation tools and don’t guarantee the actual returns you will receive.
• They don’t consider factors like market fluctuations, expense ratios, or exit loads, which can affect your final returns.
• They are a helpful way to plan your investments and get a general idea of how much your money can potentially grow over time.

If you’re considering investing in SIPs, using an SIP calculator can be a valuable tool to get started. However, it’s crucial to remember that it’s just one piece of the puzzle, and you should conduct your own research and consult a financial advisor before making any investment decisions.

How does SIP Calculator work?

A SIP plan calculator works by the values entered by the users.
You must enter the amount of investment, frequency of investment, duration of investment, and the expected returns. The SIP return calculator is designed based on the compound interest formula. The compounded interest powers the mutual fund returns.

You can understand the workings of a SIP calculator with this formula.

FV = P [ (1+i)^n-1 ] * (1+i)/iFV = Future value or the amount you get at maturity.
P = Amount you invest through SIP
i = Compounded rate of return
n = Investment duration in months
r = Expected rate of return

Take an example where you invest Rs 2,000 per month for a tenure of 24 months.
You expect a 12% annual rate of return (r).
You have i = r/100/12 or 0.01.
FV = 2000 * [(1+0.01) ^24 – 1] * (1+0.01)/0.01
You get Rs 54,486 at maturity.

SIP Calculator is a tool which is used to make a Systematic Investment Plan. Using this tool you can calculate the amount of gain you will get if you invest a certain amount of money periodically in a mutual fund. This calculator lets you enter your weekly, monthly or quarterly periodic investment amount, total duration of your investment in years, your expected annual return and inflation rate. Using these three inputs from the user, it generates the amount (maturity amount) and the gain that you can expect in return from your mutual fund investments after all the regular payments. Moreover, it also shows you the extended model of your investment

SIP stands for Systematic Investment Planning. This is an effective way of compounding money over the years. This service is generally offered by the Mutual Fund companies. One has to invest even a small amount of money periodically according to his/her goal of what they want to achieve. It is a passive approach to earn compound money over the years without knowing anything about the market.

How to use SIP Calculator for better profits – Mutual fund companies take the money from the investors and invest their money into the market. Customer does not have to care about the market fluctuations. These investments are generally best suited for long term investments, which helps the customer to earn maximum Compound Interest. NEED TO WRITE MORE, write about how you can get maximum profit from sip scheme, like take some figures like you should Invest atleast 5000 per month for 20-25 years so that you can get better return. Discuss about what expected return rate you should consider, discuss according to present scenerio, what the situation right now in 2020, mention 2020 whereever possible, write about inflation , how inflation affect your SIP INVESTMENT, why you should always consider inflation while using SIP calculator, what inflation rate you should select according to 2020.

• Investor does not have to know very much about the market technicality.
• One can invest according to their own pace and according to their own earnings.
• One can skip or alter a monthly cycle anytime they need to do so.
• Better returns than many other ways of saving money like Fixed Deposits, Recurring Deposits etc.

Why you should invest in SIP rather than opting for any other investment plan – SIP is a best option to start investing for someone who want to invest in certain scheme which can give him better return after a fixed interval of time as SIP pays off high returns in the long term with the guarantee of substantial growth in investments and involves fewer market risks as compared to other equity investments. There are several other factors which into play while we talk about why SIP is a better option then any other investment. Let’s have a look at them:

• Less term and condition : With SIP investment the term and condition are not that complex as compare to other. Here you simply select a mutual fund scheme with the fixed amount that you want to invest per month or per quarter, for a particular period of time. You can choose whether you want to pay manually every month or quarter or you can automate this process by auto debit the fixed amount from your bank.
• Suitable for Middle class people: The SIP investment is more popular among all classes of people because you can invest any amount from 500 per month to any amount you want.
• Skippable Monthly Payment: You can skip the payment of any month, you want. You can pay the amount with the payment of next month.
• Penalty on discontinuing the plan: You can stop your plan anytime you want. There are no penalties for discontinuing the plan.