SIP Calculator

What is a Systematic Investment Plan (SIP)?

A Systematic Investment Plan, or SIP, is a smart and hassle-free way to invest in mutual funds and stocks. It involves investing a fixed amount of money at regular intervals (monthly or quarterly), regardless of market conditions. Whether you're a beginner or a seasoned investor, SIPs provide discipline, convenience, and the potential for long-term wealth creation. 

What are the Benefits of SIPs?

• Affordability: SIPs allow you to start investing in stocks/mutual funds with a small amount, making it accessible to everyone.


• Rupee-Cost Averaging: SIPs help reduce the impact of market volatility as you buy more units when prices are low and fewer units when prices are high.


• Discipline: SIPs offer a sense of financial discipline as you commit to investing regularly, irrespective of market conditions.


• Diversification: By investing in mutual funds through SIP, you gain exposure to a diversified portfolio of stocks and bonds, reducing risk.


• Power of Compounding: SIP operates on the principle of receiving compound interest on your investments. Simply put, a small amount invested for a long time fetches better returns than a one-time investment.

An Example of SIP Investment:

Suppose you invest ₹5,000 per month in an equity mutual fund through SIP. Over a period of 10 years, assuming an average annual return of 12%, here's how your investment would grow:

Total Investment: ₹6,00,000 (₹5,000 x 12 months x 10 years) Future Value of the Investment: ₹11,61,695

This example illustrates the potential of SIP investments to create wealth over time through disciplined and regular contributions.

How to Start an SIP?

You can follow these steps to begin your SIP journey:

1. Start by defining your financial and investment objectives. Determine whether you're aiming for short-term, medium-term, or long-term wealth creation. Start an SIP as per your goals. Keep in mind that longer-term SIP investments typically generate greater returns.




2. Using Zerodha’s Coin, Groww, and other mutual fund platforms (you will need to register, complete KYC, and link your bank account), select a mutual fund scheme that aligns with your financial goals and risk tolerance. Mutual funds in India offer a diverse range of options, including equity funds, debt funds, and hybrid funds. You can also do SIPs on fundamentally strong stocks as well!




3. Determine the amount you want to invest through your SIP. You can start with as little as ₹100. Also, decide on the frequency of your SIP contributions, which can be monthly or quarterly, based on your financial capabilities and preferences.




4. Once everything is set up, your chosen SIP amount will be automatically deducted from your bank account on the chosen date and invested in the mutual fund scheme of your choice.

What is a SIP Calculator?

A SIP Calculator is a valuable financial tool that helps investors assess the potential returns on their investments made through a Systematic Investment Plan (SIP). This calculator allows you to estimate the future value of your SIP investments by considering factors such as the investment amount, frequency of contributions, expected rate of return, and the investment horizon. It empowers investors to make informed decisions about their wealth-building strategies. 

Using a SIP Calculator, investors can set realistic financial goals, fine-tune their investment plans, and gain a better understanding of how SIPs can help them achieve their desired outcomes. Whether you are a seasoned investor or just starting on your financial journey, a SIP Calculator is an essential tool to maximise the benefits of your investments in India's dynamic financial landscape.

How Does a SIP Calculator Work?

A SIP Calculator estimates the future value of your investments made through a Systematic Investment Plan (SIP) by factoring in various elements. Here's how it works:

The formula used by a SIP Calculator is:

Future Value of Investment ( FV ) = P × ( { [ 1 + i ] ⁿ – 1 } / i ) × ( 1 + i )

Where :

P represents the amount invested at regular intervals

i is the rate of interest on the investment

n denotes the number of payments made

Let's consider an example. Suppose you invest ₹5,000 monthly, with an expected annual return of 12%, over a period of 12 months. Plugging these values into the SIP Calculator's formula:

The monthly rate of return will be 12% / 12 = 1 / 100 =0.01

Hence, FV = 5,000 x ( { [ 1 +0.01 ] ¹² – 1 } / 0.01 ) x ( 1 + 0.01 ), which gives approx. ₹51,237 in a year.

This valuable information helps you set realistic financial goals and fine-tune your investment strategy for a brighter financial future.

How to use marketfeed’s SIP Calculator?

1. Please enter the amount you wish to invest at regular intervals (you can also use the slider for the same).




2. Type in the expected rate of returns on your investment. 




3. Enter the number of years you wish to stay invested.

The calculator does its magic and instantly delivers the wealth you will generate via the SIP.