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What is an SIP top up calculator?

The Systematic Investment Plan or SIP top up feature allows you to periodically increase your SIP instalments by a fixed amount. An SIP top up calculator is an online financial tool designed to help investors understand how such increments can potentially increase the return potential of their investments.

The calculator considers the initial investment amount, the top-up percentage and frequency, and the expected rate of return to estimate the future value of the investment. This allows investors to see the growth potential of their investments over time.

How to use an SIP Top Up Calculator

An SIP top up calculator can help you plan your investments by showing how even small but regular increments have the potential to significantly enhance your final corpus. For example, investors can choose to enhance their investments by 10% every year, if their annual salary hike aligns with that amount. By entering different increment percentages, you can ascertain what top amount is best suited to your needs.

Benefits of using an SIP Top Up Calculator

  • It offers a simple and effective way to calculate the future value of SIP investments, through the effect of regular top-ups.
  • It helps the investor set realistic investment goals by giving an estimate of how much one can expect to accumulate over a specific period.
  • It encourages investors to stay committed to their investment plan by showing the potential long-term benefits of systematic top-ups.

Example of How to Use the SIP Top Up Calculator

Consider an investor who starts with an SIP of Rs. 10,000 per month, at an expected annual return of 10% and an SIP top up rate of 10% every year. The SIP top up calculator can show them how their investment grows over time compared to a scenario without any top-ups.

For example, in 10 years, the value of the investment through a regular SIP would be Rs 20,48,450, whereas with a top-up feature, it would be Rs 31,12,547.

The SIP top up calculator is thus a useful tool for anyone looking to enhance their SIP strategy and aids in effective financial planning.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.