A SIP calculator is a simple tool that allows individuals to get an idea of the returns on their mutual fund investments made through SIP. SIP investments in mutual funds have become one of the most popular investment options for millennials lately. The SIP amount entirely depends on your accounting methods: cash accounting financial position, investment tenure and goal. Hence, you should identify your goal, corpus you wish to create, duration to achieve the goal and compute the SIP amount accordingly. You can leverage online tools to identify the right SIP amount for your investment goal. Research and analysis are necessary before making an investment decision.
Exit Load, STT (Securities Transaction Tax), Stamp Duty and tax impact are not taken into consideration in the illustration. In SIP you invest money without speculating the market condition i.e. one invests without timing the market. So, in SIP the investments are done over different market cycles and therefore you benefit from rupee-cost averaging factor. With SIP one can stay invested for a longer period of time thus, your money stays invested and generates return over a long term. So, your investment gets sufficient time to enjoy the power of compounding. One can start a SIP with very small investment say Rs 500 per month.
By investing through SIP, you spread your investments over a period of time and avoid the risk of investing all your money at a time when the market is at its all-time high. You can invest a lump sum amount when there is a steep correction in the market like the one in March 2020. So, start a SIP and whenever you see a sharp correction, top it up with lump-sum investment.
How can a SIP Calculator Help You?
SIP Calculator is a valuable tool that helps investors estimate the future value of their mutual fund investments made through a Systematic Investment Plan (SIP). By inputting the monthly SIP amount, investment duration, and expected rate of return, the calculator can determine the projected corpus amount at maturity. This tool empowers investors to make informed financial decisions by providing a clear understanding of the potential growth of their SIP investments.
- This helps bring down your average cost and when markets rebound you get higher returns due to this lower cost.
- So, in SIP the investments are done over different market cycles and therefore you benefit from rupee-cost averaging factor.
- Next, choose the SIP frequency, SIP amount and set up a bank mandate for regular payments (auto-debit).
- However, SIP investments in tax-saving mutual fund schemes, i.e., ELSS Mutual Funds, are eligible for tax deduction under Section 80C of the Income Tax Act.
- Alternatively, you can also cancel the SIP offline by communicating to the AMC and filling a form.
- This means that the returns depend upon the performance of the mutual fund you invest in.
Once you have entered the above details, the SIP calculator will provide the SIP amount you need to reach your investment goal within the specified investment tenure. If you know how much you want to invest in Mutual Funds every month, you can use the ET Money SIP Calculator to estimate the potential future value of your investments. Login to the fund house website, select the SIP you wish to cancel and click on ‘Cancel SIP’. Alternatively, you can also cancel the SIP offline by communicating to the AMC and filling a form.
Tax Implications of SIPs
The investment graph provides a visualization of the maturity amount and the wealth gained during the investment tenure. In the table format, one can easily identify the Step-Up value every year (indicated with a blue arrow). Mr Anudeep has invested INR 2,52,000 (INR 3,000 a month) in a mutual fund when the NAV is INR 20. At the time of withdrawal after seven years, the NAV is INR 50. Using the CAGR formula, we can estimate SIP returns for Mr Anudeep. It is to be noted that the SIP calculator only gives an estimate based on the inputs provided.
Option 2. If You Know Your Investment Goal Amount
Furthermore, if you have invested through an online portal like Scripbox, you can directly redeem from their portal by logging in and selecting the scheme. While investing, everyone is curious to estimate their economic profit vs accounting profit potential returns. Estimating returns ensures the investor whether or not the chosen SIP will help them realize their financial goals or not.
You get more units for the same investment amount when the markets go down. This helps bring down your average cost and when markets rebound you get higher returns due to this lower cost. Yes, you can use the ET Money SIP Calculator and Planner to estimate your SIP returns online. SIP is one of the most recommended techniques of investing in mutual funds, especially equity and hybrid funds.
Related Mutual Fund SIP Calculators
In the above formula, ‘n’ refers to the investment tenure in terms of years. Some types of systematic investment plan (SIP) such financial statements as flexible SIP allow you to modify your SIP amount. But in the case of other types of SIP, once you have started a SIP, you are not allowed to modify the SIP amount during the selected investment tenure. You can however pause or cancel the existing SIP based on your investment goals.
