What is a SIP Calculator?
A SIP calculator is a simple tool that allows individuals to get an idea of the returns on their mutual fund investments made through SIP. SIP investments in mutual funds have become one of the most popular investment options for millennials lately.
These mutual fund SIP calculators are designed to give potential investors an estimate on their mutual fund investments. However, the actual returns offered by a mutual fund scheme varies depending on various factors. The SIP calculator does not provide clarification for the exit load and expense ratio (if any).
This calculator will calculate the wealth gain and expected returns for your monthly SIP investment. Indeed, you get a rough estimate on the maturity amount for any of your monthly SIP, based on a projected annual return rate.
How can a SIP return calculator help you?
SIPs are a more lucrative mode of investing funds compared to a lump sum amount according to several mutual fund experts. It helps you become financially disciplined and create a habit of savings that can benefit you in the future.
A SIP calculator online is a beneficial tool, which shows the estimated returns you will earn after the investment tenure.
How does the ORA SIP Calculator work?
The SIP calculator uses the following formula:
M = P × ({[1 + i]n – 1} / i) × (1 + i)
- M = Maturity amount
- P = Monthly investment
- n = Number of months
- i = Monthly rate of return (Annual rate ÷ 12)
Example:
If you invest ₹1,000 monthly for 12 months at 12% annual return:
Monthly rate = 12% / 12 = 1% = 0.01
M = 1,000 × ({[1 + 0.01]^12 – 1} / 0.01) × (1 + 0.01) ≈ ₹12,809
Benefits of using ORA SIP Calculator
- Helps you decide how much to invest monthly
- Estimates total investment and maturity amount
- Saves time with quick and accurate calculations
- Enables better financial planning
