VNN Wealth’s SIP calculator is an online tool that helps you estimate the return on your mutual fund investments. It accepts simple inputs from you such as the SIP amount, investment duration, and expected return rate.

The SIP amount is the monthly investment you want to make towards mutual funds. The investment duration in years depends on your financial goals. The estimated rate of return depends upon the market conditions and the mutual fund scheme. It’s safe to work with 12% p.a. or lower.

Please note that the calculator does not guarantee returns. It only shows the estimated value of your investments based on the chosen time horizon and rate of return.

The SIP calculator essentially calculates the expected return (amount) on mutual fund investments.

Our SIP Calculator uses the future value formula based on the concept of compounding interest.

FV = P * ((1 + r)^n - 1) / r * (1 + r)

FV= Future value or the total value of your investment
P= SIP amount
n= Investment Duration in months
r= Expected rate of return in months

For example:

Your SIP amount is INR. 10,000 for 5 years (60 months) at 12% p.a.
In this case:
P: 10000
r: 12%/12 months = 1% = 0.01 (converted to decimal)
n: 5 years = 60 months

Future value = 10000 * ((1+0.01)^60-1)/ 0.01*(1+0.01)= 8,24,864

I.e. in 5 years, you’ll invest INR. 6,00,000 via monthly installments of INR. 10,000(SIP) and earn an estimated amount of INR. 2,24,864 at 12% p.a. taking your total value to INR. 8,24,864.

Mutual fund return can also be calculated as absolute return, annualized return, XIRR, or CAGR.

Note- The return on your mutual fund investments will depend on market conditions. Therefore, the calculators should only be used to estimate the future value which may change.

The SIP calculator can help you set financial goals and achieve them in a given time frame. The tool come in handy when you want to accurately plan your SIPs across various mutual funds.

Let’s say you want to make INR. 10,00,000 in 5 years. Using the calculator inputs, you can come up with an SIP amount that you need to invest every month to reach INR. 10,00,000. In this case, it would be approximately INR. 12,125/month at 12% p.a. over the 5 years.

Or, you can change the tenure. The same amount can be generated with an SIP of INR. 10,000/month at 12% p.a. over 6 years.

The concept of finalizing the SIP amount based on your goal amount is also known as goal-based SIP. Read more about it here.

A systematic Investment Plan is ideal for salaried individuals. It is easier for investors with regular income to set aside a certain amount per month to be invested in mutual funds.

Therefore, the SIP calculator can be used by investors who want to invest consistently. That way, financial goals such as retirement, buying a house, wedding, or children’s education can be planned effectively.

If you’re a freelancer/self-employed individual, you can still avail the benefits of SIP via the Systematic Transfer Plan (STP) route.