SIP Calculator

What is an SIP calculator?

A Systematic Investment Plan (SIP) Calculator is an online easy to use tool that helps you to calculate your estimated returns on your mutual fund investment. By using SIP calculator, you can check the future value of recurring investment in mutual fund schemes.

Runtime HRMS online SIP calculator helps you to calculate the expected returns based on investment amount, investment duration & expected annual rate of return. Note that the actual returns on mutual fund investment may vary depending on different factors. Use our online SIP calculator to simplify your investment planning for future wealth creation.

What is a Systematic Investment Plan (SIP)?

A SIP is an investment method where you contribute a fixed amount regularly (weekly, monthly, or quarterly) to a mutual fund scheme. This disciplined investment strategy is ideal for individuals who prefer to invest smaller amounts over time rather than a large one-time payment.

SIPs are highly effective for investors aiming to build wealth gradually and achieve long-term financial goals like retirement, education, or property investment. Additionally, SIPs mitigate market volatility risks by averaging the purchase cost of investments over time.

How Does the SIP Calculator Work?

The SIP Calculator uses the following formula to estimate the future value of your investments:

SIPs are highly effective for investors aiming to build wealth gradually and achieve long-term financial goals like retirement, education, or property investment. Additionally, SIPs mitigate market volatility risks by averaging the purchase cost of investments over time.

Where:

• A = Future Value of Investment
• p = SIP Amount (Regular Contribution)
• r = Expected Rate of Return (in decimal form) / Number of compounding periods per year
• n = Total number of SIP instalments

Steps to Use the SIP Calculator:

1. Enter Your SIP Amount: Specify the fixed amount you plan to invest regularly.
2. Choose the Expected Rate of Return: Select an estimated return rate based on past market performance.
3. Select the Investment Period: Define how many months or years you intend to continue investing. 
4. Calculate: The calculator will instantly display the estimated future value of your investment.

Example Calculation:

Suppose you invest ₹5,000 monthly in a mutual fund scheme with an expected annual return of 12% for 10 years.

P = ₹5000, r = 0.01 (i.e., 1% monthly), n = 120 months (10 years)

A = 5000 × (( (1 + 0.01)¹²⁰ – 1 ) / 0.01 ) × (1 + 0.01)

So, after 10 years, your total investment of ₹6,00,000 will grow to approximately ₹11,61,695.

Benefits of Using the SIP Calculator

• Accurate Planning: Easily determine how much you need to invest regularly to reach your financial goals.
• Timesaving: Avoid manual calculations and get instant results.
• Goal-Based Planning: Evaluate different scenarios by adjusting investment amounts, interest rates, or timeframes.
• Informed Decision Making: Compare multiple mutual fund schemes to choose the most rewarding option.
• Flexibility: See how minor changes in monthly contributions impact your final corpus.

Key Factors Affecting SIP Growth

• Investment Duration: Longer durations offer better compounding benefits.
• Contribution Amount: Higher SIP amounts can accelerate wealth creation.
• Market Conditions: Fluctuations can affect fund performance.
• Rate of Return: A realistic return expectation aligned with your risk appetite is crucial.