What is SIP return calculator and its benefits?

Financial calculators are tools that have simplified decision making in the context of mutual fund investments. These are online tools that help one calculate an estimated corpus on their mutual fund investments over a period of time or to estimate how much money they need to save from today for potentially reaching their desired financial goals in the short term or long term future. 

Either way, these calculators can be accessed online by investors. This can assist them for making SIP mutual fund plans, lumpsum, retirement, child education, car loan, buying a house, asset allocation, etc.

One such useful and user friendly calculator is the SIP calculator. It will ask one for the amount they wish to invest in a chosen fund monthly or in any other frequency, along with the time period of investment. Thereafter, with an assumed rate of return, it helps to understand an estimated corpus that an investor can expect to accumulate with time, patience and disciplined investing over the years. 

Let us understand these through couple of examples – 

Example 1 – Mr Akram invests an amount of Rs. 20,000 monthly in a mutual fund through SIP, over a period of 10 years, he can accumulate a corpus valued more than Rs 46 Lakhs, assuming the rate of return to be 12%. In this case, the invested amount by him over 10 years is Rs. 24 Lakhs only. If he invests in the chosen fund timely, the SIP return Calculator helps him understand the corpus he can potentially accumulate. 

Example 2 – Also, if Mr Akram has a long term financial goal like his retirement or child’s higher education, the SIP calculator can help him know how much he need to start investing from now onward  to reach the designated financial goal in future.

For example – Mr. Akram wants a corpus of Rs 5 Crores after 25 years for his retirement. Being a long term investor with high risk appetite, he can invest in equity mutual funds and expects at least 12% annual returns. If he inputs these values in the SIP calculator – Goal amount, expected returns and time period, it will display the monthly SIP amount as Rs 27,900.  That means, Mr. Akram has to start a monthly SIP of Rs 27,900 for 25 years to achieve his retirement goal of Rs 5 Crores after 25 years. Therefore, it is very easy to plan your financial goals using the SIP calculator. 

SIP return calculator gives investors the advantage of planning without the hassle of manual calculation. It is fast, easy, can be accessed online and used as per your convenience. It also gives confidence to new or potential mutual fund investors as they get more clarity on how much to start investing with and what they can expect out of their SIP investment. 

In this article, we did an analysis on how SIP calculator can aid the process of making a SIP Investment in a mutual fund scheme and help potential investors gain an idea on what to expect from their predetermined investments. 

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