SIP Calculator
Estimate the future value of your monthly investments (SIP).
Investment Details
Projected Results
Invested Amount
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Est. Returns
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Maturity Value
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Understanding SIPs
A Systematic Investment Plan (SIP) is a method of investing a fixed amount of money in mutual funds at regular intervals (usually monthly). It's a disciplined approach to investing that helps you take advantage of market volatility through a concept called Rupee Cost Averaging.
The Formula Used
The future value of a SIP can be calculated using the future value of an annuity formula:
FV = P × ({[1 + i]^n – 1} / i) × (1 + i)
Where:
- FV is the Future Value or Maturity Amount.
- P is the monthly SIP amount.
- i is the monthly interest rate (annual rate / 12 / 100).
- n is the number of months (investment tenure in years × 12).
Frequently Asked Questions
What is Rupee Cost Averaging?
It's an automatic market-timing mechanism. When the market is down, your fixed SIP amount buys more units of a mutual fund. When the market is up, it buys fewer units. Over time, this averages out your purchase cost per unit.
Is the return guaranteed?
No, SIP returns are linked to market performance and are not guaranteed. The "Expected Return Rate" is an assumption for calculation purposes. Equity funds have the potential for high returns but also carry market risks.
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