What is a SIP (Systematic Investment Plan)?

A Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds. You invest a fixed amount of money at regular intervals (usually monthly) over a long period. This allows you to benefit from the power of compounding and rupee-cost averaging.

How Does the SIP Calculator Work?

This calculator uses the future value of an annuity formula to estimate the maturity value of your SIP. This is the standard, correct way to calculate SIP returns. It accurately reflects how your investment grows over time with regular contributions and compounding interest.

The formula used is the standard future value of an annuity formula:

FV = P × [((1 + i)^n - 1) / i] × (1 + i)

Where:

• FV = Future Value (Maturity Amount)
• P = Periodic Investment (Monthly)
• i = Interest Rate Per Period (Monthly Rate = Annual Rate / 12)
• n = Number of Periods (Number of Months)

This calculator takes into consideration monthly compounding which will get you the accurate results

How to Use the SIP Calculator:

1. Enter your planned monthly investment amount.
2. Enter the expected annual rate of return (as a percentage).
3. Enter the investment period in years.
4. Click the "Calculate" button.

The calculator will show you:

• Maturity Amount: The total value of your investment at the end of the investment period.
• Total Investment: The total amount of money you invested over the period.
• Wealth Gained: The profit you made on your investment (Maturity Amount - Total Investment).

Disclaimer:

This SIP calculator provides an estimate based on the inputs provided. Actual returns may vary due to market fluctuations. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Consult with a financial advisor for personalized advice.