SIP Calculator

Why Choose SIPs?

SIPs are becoming increasingly popular in India for a few major reasons:

• Discipline Investment: SIPs create a habit of investing and saving on a regular basis, which is essential for building wealth in the long run.
• Rupee Cost Averaging: You are investing a fixed sum of money regularly. This will allow you to buy more units when the market is down and fewer units when the market is up. This works to average out your cost in purchasing the funds and averages your monthly purchases during market volatility.
• Benefits of Compounding: The interest or returns that your money generates earns interest and returns as well. This compounding returns causes your total account value to grow exponentially over time and even more over long-term investments.
• Flexibility: You can start SIPs as low as ₹100 or ₹500 depending on the fund house. You have the flexibility to temporarily pause and re-start your SIPs when your finances change. You can also increase or reduce the amount of the SIPs periodically as it suits your finances.
• Diversification: Mutual funds, which SIPs are invested into, are inherently diversified with the use of many different asset classes; thus reducing overall risk.
• Professional Management: You will have the comfort that your assets are being managed by an experienced fund manager who makes informed decisions on your behalf.

How our SIP Calculator works

The SIP Calculator is a helpful, easy-to-use tool that will help you estimate the future value of your SIP investment. The SIP calculator will ask you for three pieces of information:

1. Monthly Investment Amount: the fixed amount you plan to contribute regularly. 
2. Investment Period (Years): the amount of years you plan on investing in SIP.
3. Expected Annual Returns (%): an estimated annual return you expect on your investment. 

Keep in mind your actual return will differ based on market conditions and performance of the funds you invested in, but using a reasonable historical average or forecast should give you a fairly accurate insight.

The calculator applies a calculated method to estimate your maturity amount and total wealth created based on your input. This information can help you set goals and adjust your SIP to meet your goals.

Frequently Asked Questions (FAQs)

1. What is a Systematic Investment Plan (SIP)? 

A Systematic Investment Plan (SIP) refers to the process of investing in mutual funds through the pooled investment of a certain amount of money at regular intervals (e.g. monthly, quarterly) instead of investing a lump-sum amount. It is like a recurring deposit, except that it is for a mutual fund. 

2. How can SIPs help during volatile markets? 

SIPs utilize a concept called “Rupee Cost Averaging.” When markets are down, you will acquire more units with the same investment amount and fewer units when markets are up. Over time, this ultimately averages out your purchase price, thus reducing market volatility and the need to time the market. 

3. What is the minimum amount I can invest in a SIP in India? 

The minimum SIP amount varies from fund to fund and by fund house, but you can generally start any SIP amount between ₹100 and ₹500 per month. 

4. Am I allowed to stop or pause my SIP at any time? 

Yes, You can stop or pause your investment by informing the Asset Management Company (AMC) or your platform provider and there are generally no penalties for stoppage or pauses.

5. Are SIPs guaranteed returns? 

No, SIPs in mutual funds are volatile at the time of trade and the returns are not guaranteed. The changes in return depend on the market value of the underlying assets that the mutual fund invests in. However, SIPs in time, especially in long-term, reward investors with good returns caused by compounding and rupee cost averaging. 

6. Are SIPs tax-efficient? 

Yes, If you invest in ELSS mutual funds using SIPs, you can avail of deductions under Section 80C of Income Tax Act, 1961, up to ₹1.5 lakh in financial year. But these ELSS funds usually have a 3-year lock-in period. 

7. How long should I invest in SIPs? 

The time horizon for investment depends on the financial goal you have set. For a substantial goal like retirement or a child’s education, a longer time frame (10-20 years) is strongly recommended so you fully utilize compounding and volatility in the market. For a shorter time frame (3-5 years), debt funds or hybrid funds may be more appropriate for your goals.

8.  What is Step-Up SIP? 

Step-Up SIP (or Top-Up SIP) is a mutual fund SIP that allows you to step up or increase your SIP amount periodically at your discretion. This is helpful when you get a salary/ income or wherever you see an increase in salary/ income and want to increase your investments to build on your wealth creation.

9.  How do I choose a mutual fund for my SIP? 

First, identify what are your financial goals, risk appetite, and time horizon. Check their past performance, expense ratio, experience of fund manager, and AUM (assets under management). It is always good to have a financial adviser to guide you.

10.  What documents do I need to start investing in a SIP in India? 

Typically, all you will need is a PAN card, Aadhaar card (for KYC), proof of address such as a utility bill, and your bank account. All mutual fund investments require you to comply with KYC (Know Your Customer).

11.  Can I invest in more than one SIP at the same time? 

Yes, you can decide to invest in one or several SIPs across different mutual fund schemes and/or different fund houses, providing additional diversification to your portfolio and helping you achieve different financial goals.

12. What if I forget to pay a SIP?

If you forget to pay a SIP payment there are usually no other penalties the mutual fund house will impose, however if you continuously forget or don’t make the payments the fund house or bank may cancel or stop your SIP mandate. It’s best to ensure sufficient funds in your linked bank account on the SIP debit date.

Disclaimer: This calculator provides only estimated returns based on the inputs you provide. It is intended for informational purposes and should not be considered financial advice. Mutual funds do not guarantee fixed returns, and actual outcomes may vary. Past performance is not indicative of future results. Consult a qualified financial advisor before making any investment decisions.