SIP Calculator

1) What is a SIP Calculator / Lumpsum Investment?

A lumpsum investment or one-time investment is an investment style in which you invest once (lumpsum) and then let your invested money grow by compounding over a period.

2) SIP Calculator/Loansum Calculator kya hai?

SIP Calculator/Lumpsum calculator You can use to calculate the maturity value of your investment. In simpler terms, the Lumpsum Calculator indicates the future value of an investment you make today at a specific rate of interest. For instance: You register lump sum calculator, If you are going to invest 1 lakh rupees for 60 years at the rate of 15% interest, your future value of investments would be 43.8 cr. after 60 years.

3) How this Lumpsum Calculator works?

Even a layman can use our lumpsum calculator which is highly user-friendly. Using our Lumpsum Calculator, you just need to fill in the required inputs such as, the amount you wish to invest, the period (in years) you will stay invested and the expected rate of return per annum you think, the investment will provide. Once you input the necessary variables, the future value of your investments will be calculated.

The formula which we used in this Lumpsum Calculator is: Value = Investment*(1+R)N

4) Lumpsum Investment: When you should prefer it?

Any investment (lumpsum or SIP) ideally needs to be done considering many factors such as current income, risk profile, age, tax constraints, liquidity needs, time frame & some more specific constraints. When there is a large surplus funds available and/or one feels that large correction of market is behind and market will not fall just after investing, lumpsum investment is preferred. Lumpsum investment over longer time helps give compounding rate of returns.

5) Difference between Lumpsum and SIP?

Under lumpsum investment one has to invest one time only where as in SIP, Systematic Investment Plan one had to invest a fixed amount periodically. In the lumpsum investment style, market condition matters a lot, because if the market makes a big correction after your investment, it will take you years to get back to your original investment amount. Unlike at SIP or systematic investment where the timing of the market does not matter as money is deployed in all kinds of market scenario. So, return earned is weighted average return.

6) Where to park my funds for Lumpsum investment?

There are several instruments which can be used for lumpsum investment such as Mutual Funds, Equity Shares, Exchange Traded Funds, Liquid Funds, Bonds, Fixed Deposits etc. But again, we believe that you must choose these devices for lumpsum investment only after assessing your danger profile, financial targets, liquidity needs seriatim.

FAQs for SIP Calculator

What is an SIP Calculator?

An SIP or Systematic Investment Plan Calculator is simply a financial tool that helps the investors to estimate the amount they would take home after a period of time by investing a certain amount regularly into mutual funds.

How does SIP Calculator works?

The SIP Calculator is based on the compound interest formula and estimates returns as follows:

n \hspace{3mm} A = P \times \frac{(1 + r)^{n} - 1}{r} \times (1 + r)nA=P×r(1+r)n−1​×(1+r)

Where:

A = Final Amount

P = Monthly Investment

r = Monthly Interest Rate ( Annual Rate 12 100 )

n = Number of Months

What are the inputs needed for SIP Calculator?

You can enter the following details while using an SIP Calculator:

Monthly Investment Amount

Expected Annualized Returns (%)

How Many Years You Will Hold the Investment

Does SIP Calculator guarantee return on investment?

No, since SIP Calculator gives the return from the past or expected return. Actual returns will vary with market conditions.

Benefits of SIP Calculator What is SIP Calculator?

A SIP Calculator enables the investor:

Plan their investment goals

Explore how compounding works

[compare] investment options

Is SIP Calculator useful for different Mutual Funds?

Yes, for any mutual fund, you can use an SIP Calculator for it by manipulating expected return rate based on past performance of the fund.

Should SIPs be preferred for investment over a lump sum?

Investment in SIPs reduces risk as the ups and downs in the market are averaged out in SIP investment but lump sum investments can be risker but if invested at the right time can fetch more returns.

How often do we invest in an SIP?

While most SIPs let you invest monthly, some plans allow you to invest weekly or quarterly.

Can SIP be used for short term investment?

SIPs are ideal for long-term (5+ years) investments as you reap benefits of compounding. Other investment options might be better for shorter term goals.

Can I increase or decrease the SIP amount?

Yes, a few mutual funds allow step-up SIPs, in which you increase your investments periodically. You can stop or pause your SIP whenever you want.