SIP and SIP return calculator

SIP or SIP mutual fund is an easy way of investing in mutual funds. Mutual funds India provide 2 ways to invest in mutual funds – lumpsum and SIP. SIP is the easiest way to invest in mutual funds, through which you can invest a fixed amount at regular intervals (daily, yearly, quarterly or monthly). If you invest in SIP, you will have to decide the SIP contribution amount, the SIP date, tenure of investing and the mutual fund schemes in which you want to invest. The longer you invest for, especially in the case of equity mutual funds, the better the potential returns would be, due to the magic of power of compounding. One needs to be patient, inculcate financial discipline and seek the advice of a financial expert, in order to succeed in the journey of investment.

The reality, however, is that only investing in mutual funds for the long term may not help you achieve these aforesaid financial goals, especially if they are big ones such as buying a house.

Then how it is possible? It is possible only when you start investing the right SIP amount.

What is the right SIP amount?

To decide the right amount for your SIP mutual fund, you need to decide the following –

• What is the present cost of your financial goal
• How far you are from the goal period, in terms of years
• Expected inflation rate
• What is the future goal amount after accounting inflation
• Know the correct SIP amount to reach the inflation adjusted goal amount

For better understanding and efficiency to calculate SIP returns, one can use the SIP return calculator. This is a financial tool which is freely available online, user friendly and gives you estimated results in seconds, thus helping in informed financial planning. Suppose, you are able to invest an amount of Rs. 12,500 per month in a mutual fund for a period of 10 years, and you assume the return to be 12% p.a., your corpus would be Approx Rs 29,04,238. Once investors come to know what they can expect out of their mutual fund investment, over a given tenure, it becomes easier to plan finances monthly and move steadily towards goals.

In some cases, the investor might know the corpus goal they wish to reach after a certain tenure. Then, he/she can use the target SIP return calculator to find out how much ideally should they invest to reach this goal. Suppose, one wants to reach a goal of Rs 30 lakh, considering the inflation to be zero and return  12% p.a. expected, we can say that the investor should ideally start a SIP of Rs. 3,033 monthly in order to reach the goal amount. Hence, to calculate SIP returns, the best and convenient way is to use the SIP calculator.

It is to be duly noted that these tools can only give you an estimated amount as mutual funds are subject to market risks and their returns are not fixed. They can only be predicted based on the historical returns of the fund, expertise of the fund manager and market conditions during the investment period.

Investors looking to get sound information regarding mutual fund SIP, its returns, calculations and more, can use tools like SIP calculator to have all their questions answered. This keeps the process of mutual fund investment transparent, easy, and hassle free.