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What is a SIP calculator?

There are two ways to invest in mutual funds: SIP (Systemic Investment Plan) and lump sum. The former is the more popular method of investing in mutual funds, as it does not require a large capital to begin with. You can start your journey with ₹100 as well.Read More

If you’ve decided you want to participate in mutual fund investments, you can use a SIP calculator. A SIP calculator is a financial tool that tells you the returns your SIP will yield over time. Our online SIP calculator splits your estimated investments and returns, giving you a clear picture of your SIP returns and SIP interest rate. Note, however, that the returns promised by the SIP planner are only an estimate and might vary from the actual returns of your mutual fund investments.Read Less

SIP Calculator

How does a SIP calculator or SIP Planner work?

Our SIP calculator is based on the principle of compounding (or compound interest). Unlike simple interest, compound interest earns interest on both the principle amount as well as the interest earned on the amount in previous years.

Using this principle with some details, such as periodic investments, duration of investment, and expected return, the SIP investment calculator estimates the maturity amount of your mutual fund investments.

The SIP calculator uses the following formula:

M = P × ({[1 + i] n – 1}/i) × (1 + i).

Where M stands for the amount you receive upon maturity; P represents the amount you invest at regular intervals; n is the number of payments you have made; and i is the periodic rate of interest.

What are the benefits of using a SIP calculator?

IDFC FIRST Bank’s online SIP calculator is an indispensable financial tool for your mutual fund investments. Here is how it helps you:

The SIP investment calculator assists in long-term financial planning.
The calculator can give you a rough estimate of your SIP returns, which you can use to improve your investment portfolio.
The monthly SIP calculator saves time, that would otherwise go into manually calculating your SIP returns.

How to use the IDFC FIRST Bank SIP calculator?

It is easy to understand as well as use our online SIP calculator. It has three sections: your monthly investment, expected SIP returns, and the duration for which you’re investing. Input the details based on your investment appetite and long-term goals. After you’ve done that, the SIP calculator tool will compute your final maturity amount.

SIP Calculator FAQs

Which one is better: SIP or a lump sum?

SIP and lump sum are both great ways to invest in a mutual fund scheme. However, an SIP is a better option if you have a monthly source of income and have a low-risk tolerance. Lump sum, meanwhile, makes more sense for high-risk investors who have ready capital.

What are the types of SIP?

Choosing the right type of SIP helps you maximize your returns without affecting your monthly budget. Here are the four different types of SIP available today.

  • Top-up SIP
    In Top-up SIPs, you can consistently increase your monthly investment amount. You get to decide the rate at which the amount increases.
  • Flexible SIP
    Flexible SIPs allow you to increase or reduce your SIP amount.
  • Perpetual SIP
    Unlike the other types of SIPs, perpetual SIPs do not come with an end date. You can keep investing for as long as you want.
  • Trigger SIP
    Trigger SIPs are better for people who know the securities market. In Trigger SIPs, you start investing when the index hits a certain level, or when the NAV rises or falls.

What is the return rate in SIP?

The SIP interest rate varies depending on the mutual fund scheme. High-risk equity schemes earn more, while long-term debt-based mutual fund schemes earn less.

How is the SIP maturity amount calculated?

The final maturity amount is calculated by the SIP calculator using the formula:

M = P × ({[1 + i] n – 1}/i) × (1 + i).

Where M stands for the amount you receive upon maturity; P represents the amount you invest at regular intervals; n is the number of payments you have made; i is the periodic rate of interest.

For instance, let us say you invest ₹5,000 a month in a mutual fund scheme using the SIP route. You’ve invested the money for 10 years and are expecting returns of 10% per year. When you enter these figures in the formula, M, which is the final maturity amount, comes out to be ₹10,32,760. So, the return of your investment comes out to be ₹4,32,760.

Can you lose money in SIP?

Mutual fund investments are subject to market risks. The money is used for buying securities, which can increase or decrease at any time. So, yes, you can lose money in SIPs.

Can you modify your SIP amount?

Yes, you can modify your SIP amount. Flexibility is one of the great things about mutual fund investments. You can increase or reduce your SIP amount in a mutual fund scheme if you feel it isn’t giving you the best returns.

Can you renew a SIP?

Yes, you can renew your SIPs when needed.

More FAQs