How SIP Calculator Works?

by Angel One
The SIP calculator calculates future savings growth, aiding informed financial decisions. Easy online tools enhance planning and risk management for a secure financial future.

Have you ever wondered if you could look ahead to see how your savings might grow? That’s exactly what a SIP (Systematic Investment Plan) calculator can help you do. Think of it as a tool for your financial future. This handy gadget lets you see future earnings from your SIP investments, guiding you towards smarter financial choices.

A SIP calculator isn’t just for the finance-savvy. It’s made for all sorts of people who are looking to put some money aside regularly. So let’s simplify this financial helper and show you just how easy it is to use.

What Is an SIP Calculator?

A SIP Calculator is a straightforward and smart tool built to guide investors. It helps you plot out your savings plan, giving you a sneak peek at the future earnings from your SIP investments in mutual funds.

By entering how much you plan to invest each month, the SIP calculator can show you an estimated total that you might gather by the end of your investing period.

How SIP Calculator Works?

An SIP calculator works out the future value of your investments using a simple math formula that factors in compound interest. This is the interest you earn on your investment and the interest that’s already been added to it. Here’s the formula it uses:

Let’s break it down:

FV = P [ (1+i)^n-1 ] * (1+i)/i

where:

FV = Future Value

P = Regular investment amount

i = Rate of return

n = Number of installments

• Future Value is what you end up with after all the interest is added.
• Investment is what you pay each time.
• The interest rate is the growth rate you expect, broken down per payment period.
• Number of payments is how many times you’re going to invest.

Let’s say you’re planning to put ₹10,000 into your SIP every month, expecting a 12% return each year, and you keep at it for 10 years. The SIP calculator figures out the end total for you like this:

FV = 10,000 [ (1+0.01)^120-1 ] * (1+0.01)/0.01

FV = ₹23,23,391

And it tells you that you might have around ₹23,23,391 after those 10 years.

How To Use an SIP Calculator Online?

Using an online SIP calculator is super straightforward. Just follow these simple steps:

• Go to Angel One SIP calculator.
• Type in the money you plan to invest at regular intervals (it could be every month, every three months, or once a year).
• Put in the return rate you’re hoping to get from your investment.
• Decide how long you want to keep investing.

After you’ve entered all this info, press the ‘calculate’ button. The calculator will show you a forecast of what you might earn from your SIP.

Using a SIP investment calculator has many advantages:

• Smart Decision Making: It helps you make informed choices based on facts rather than guessing.
• Financial Planning: You can plan your money moves better and set clear financial goals.
• Flexibility: The calculator lets you try out different investment amounts, durations, and expected returns.
• Time Saver: Say goodbye to complicated math; this tool saves you time.
• Risk Control: Calculating future returns, helps you understand and manage risks.

The perks of using a SIP calculator go beyond just being handy. They help you manage risks, set achievable financial goals, and eventually, secure your financial future.

Conclusion

To sum up, a SIP mutual fund calculator isn’t just a tool—it’s your friend on your journey to financial stability and growth. It helps you see into your financial future, so you can make smart choices about your money.

In today’s fast-changing world of finance and technology, tools like the SIP calculator are making investing easier for people everywhere. So why wait? Start using a SIP calculator now and make planning your investments simpler.