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ToggleSystematic Investment is a way of investing in a mutual fund for a prospective investor. A fixed amount of money is invested at regular intervals known as SIPs. Through the route of SIPs, you can invest weekly, quarterly and monthly. And SIP calculator helps to calculate the fixed amount according to your financial goals.
SIP calculator is a tool that allows you to estimate the return of investments in mutual funds through systematic investment. It calculates the potential return for the investor. Although the actual return from the mutual fund scheme may vary considering several factors. SIP calculators are online tools that help to calculate the systematic amount to achieve a financial target based on an expected annual return. But it does not provide any clarification for the exit load and expense ratio (if any).
A SIP plan calculator works on the values the user enters. You have to enter the amount you want to invest, frequency of investments, time period, and expected returns. SIP calculation is based on the compound interest formula. Meru Accounting SIP calculator provides you with a direct comparison of the returns offered by the mutual fund with fixed deposits.
FV = P [(1+i) ^n-1] * (1+i)/i
Here,
F.V is the future value or the amount you get on maturity.
P is the investment amount at regular intervals.
n is the duration of investment in months.
i is the compounded rate of return.
r is the expected rate of return.
Let say for example you want to return an investment of $ 2,000 per month for 12 months. The expected rate of return is a 12 % annual rate of return(r).
So, now i = r/100/12 or 0.01.
FV = 2000 * [(1+0.01) ^12 – 1] * (1+0.01)/0.01.
You get 25,619 on maturity.
There is no maximum limit of investment in SIP. The minimum amount you get started is Rs. 500 per month.
There isn’t any maximum tenure in SIP. One can invest for any time duration. The preferable minimum duration is 3 years.
SIP calculator helps in:
Yes, you can check returns on the SIP investment calculator and increase/ decrease the amount.
No, you cannot invest in equity mutual fund investment through SIP. The investment is done in debt and hybrid mutual funds through SIP.
Yes, SIP can be renewed. There is also an option to cancel the auto-renew feature.
SIPs are often considered either a mutual fund or another type of investment. But the fact is it is a way of investment and not a fund or scheme or investment. It is a tool of periodical investment in a fund or scheme of your choice.