What factors do you consider before making an investment? The most common answer from both novice and experienced investors is the potential returns the investment will provide. In the case of investors who are investing for the first time, questions like “How much should I invest?” and “Why should I invest this much?” often arise. A mutual fund calculator offers answers to these questions. In this article, we take a closer look into understanding a SIP returns calculator and its uses. Keep reading to find out!
What is an SIP Calculator and why is it Important?
A SIP or Systematic Investment Plan is an investment strategy that enables investors to invest small sums at regular intervals. The beauty of SIP investments lies in the fact that you can invest with amounts as low as Rs. 100 every month in a disciplined manner to ensure consistency.
Have you heard the quote, “If a man knows not which port he sails, no wind is favorable.” So, although an SIP helps you invest with as little as Rs. 100, will it be enough to help you retire after 30 years? If not, then how much should you invest to amass a corpus of 10 crores in 30 years? Answering these questions would require some calculations, but an SIP calculator makes the whole ordeal much more convenient.
A SIP calculator helps you calculate the returns that you can expect to receive from the monthly investment that you make. The calculator however will require you to enter the following inputs:
- The amount you plan to invest every month via SIP
- The duration of your investment
- The anticipated returns from your investment
Once you provide these parameters, the SIP calculator will generate the total corpus your investments will amount to along with the returns generated.
Why Should you use an SIP Calculator?
Let’s understand the answer to this question better with an example.
Sachin is new to the Indian markets, and he plans on investing in mutual funds to build a corpus in order to buy a house 10 years down the line. After all his expenses and savings are covered, he is left with Rs. 15,000 every month. After taking a look at the previous performance of the markets Sachin expects returns between 12-14%. So, is investing 15,000 enough, and should he expect to buy a house using this amount? Let’s find out how using an SIP calculator in this case will help.
Sachin heads over to an SIP calculator and let’s find out how this helps.
From the data provided above Sachin enters the amount he expects to invest every month, the time period he is investing for and the returns he expects. This gives him the following data.
| Monthly SIP | Expected Returns | Time Period | Corpus |
| Rs 10,000 | 14% | 15 Years | 61 Lakh |
| Rs 15,000 | 14% | 10 Years | 34 Lakh |
| Rs 15,000 | 12% | 15 Years | 75 Lakh |
| Rs 15,000 | 14% | 15 Years | 91 Lakh |
From the above data, Sachin can understand if investing Rs. 15,000 will help him or not. If Sachin feels that a corpus of 91 lakhs is not enough, it also gives him an understanding to not keep unrealistic expectations. Instead, he should focus on either increasing the amount invested in a systematic manner or look for alternative investments that could involve higher risk but at the same time provide higher returns instead of relying on funds that offer the same returns as the Nifty or Sensex.
Why Should You Use an SIP Calculator?
As we have seen in the above example, an SIP calculator gives you an idea of where you might end up if you invest with a certain amount. This in turn helps you plan your goals better. The best part here is that it is simple to use and is free of cost at the same time. So, in no situation will you be left stranded, investing Rs. 100 and expecting it to buy you a Rolls-Royce in 30 years.
In Closing:
Now that you have understood what an SIP calculator is, here is another tip that will help you use it effectively and at the same time help you plan your goals better. When it comes to returns, it is important to take realistic returns. The Indian market, for example, has given 14.5% returns over the last 20 years. Ensure that the returns you consider are closer to the reality of what your assets can and have delivered. So, are you prepared to take the next step in achieving your goals? Click here to use our SIP calculator
FAQs on SIP Calculator
How much is 1000 rupees SIP for 10 years?
To calculate the returns on a 1000 rupees SIP over 10 years, leverage a SIP calculator like the one found at https://bullsmart.in/calculators/sip-calculator. Assuming an annual return rate of 12 %, the maturity amount for a monthly SIP investment of 1000 rupees for a decade would be approximately 2,00,000 rupees.
What is the return of 5000 monthly SIP?
For gauging the return on a 5000 rupees monthly SIP, employ a reliable SIP calculator, such as the one accessible at https://bullsmart.in/calculators/sip-calculator. The return on investment hinges on the anticipated annual return rate and the SIP duration. For instance, with an expected annual return rate of 12% and a 10-year horizon, the maturity value would approximate 11,61,000 rupees.
What is the Average Return on SIP?
Determining the average return on a SIP involves considering variables like the mutual fund type, investment tenure, and market conditions. A SIP calculator proves invaluable for estimating returns based on these factors.
How to get 1 Crore in 5 Years?
To attain 1 crore in 5 years, employ a SIP calculator to ascertain the monthly SIP amount needed for this objective. Assuming as anticipated annual return of 12%, the monthly SIP amount required to reach 1 crore in 5 years would be around 1,40,000 rupees. It’s crucial to note that actual returns may vary based on market conditions and other influencing factors.
