Mutual fund investments are becoming increasingly popular in India as people seek better returns on their savings. One of the most popular mutual fund investment methods is the Systematic Investment Plan (SIP).
SIP allows investors to invest small amounts of money regularly, making it an accessible and affordable investment option. While investing in mutual funds through SIP is easy, assessing your returns can be tricky.
In this situation, the SIP return calculator can help you assess your mutual fund SIP returns.
What is a SIP Calculator?
An online tool known as a SIP calculator assists in calculating the returns on mutual fund investments made through SIPs. The calculator considers various factors, such as the amount of investment, the frequency of investment, the expected rate of return, and the investment tenure, to calculate the estimated returns on your investment.
It’s important to note that the calculator does not factor in the impact of exit loads and expense ratios on the actual returns, which may differ from the calculated results. The calculator determines the required SIP amount to achieve financial goals based on the projected annual return.
While some individuals can create their calculator using MS Excel, using the free SIP Calculator offered by fund houses or mobile applications can save time by simplifying complex computations.
How Does the SIP Calculator Work to Assess Your Mutual Fund SIP Returns?
To use the SIP return calculator, you must input specific data related to your mutual fund investment. Here are the key inputs required.
- Investment Amount: This refers to the investment amount that an individual intends to make in a mutual fund through SIP.
- Frequency of Investment: This is the frequency at which you want to make your SIP investment. You can choose from monthly, quarterly, half-yearly, or yearly frequencies.
- Investment Tenure: This is the duration you want to invest in the mutual fund through SIP. You can choose the tenure as per your investment goals and requirements.
- Expected Rate of Return: This is the rate of return you expect to earn on your mutual fund investment. You can check the historical performance of the mutual fund scheme and make an informed decision about the expected rate of return.
Once you enter these inputs into the SIP calculator, it will present the estimated returns on your investment. The calculator will provide you with a detailed summary of your investment, including the total investment amount, expected returns, and the maturity value of your investment. You may also get a graphical representation of your investment returns, making it easier to understand the investment performance.
Additionally, the SIP calculator can help you compare different mutual fund schemes and assess their potential returns. You can input the data for multiple schemes, and compare the estimated returns to decide which fund to invest in. You can also experiment with different investment amounts, frequencies, and tenures to find the best investment option that suits your needs.
With the right inputs and assumptions, the SIP calculator can effectively analyse your investment options and identify the best mutual fund schemes to invest in. If you’re considering investing in mutual funds through the SIP route, use the SIP calculator to make the most of your investments.
