BAJAJ FINSERV ASSET MANAGEMENT LIMITED.
BAJAJ FINSERV ASSET MANAGEMENT LIMITED.
An SIP Calculator is a free online tool that helps you estimate the future value of your Systematic Investment Plan (SIP) investments. It calculates the potential growth of your mutual fund investments based on three key inputs, the monthly SIP amount, investment tenure, and expected rate of return.
Using the power of compounding, an SIP return calculator projects your total invested amount, estimated returns, and maturity value. This helps you compare different SIP investment scenarios, plan financial goals, and understand the potential growth of regular investments over time.
While an SIP calculator provides useful estimates, actual returns may vary depending on market performance. The calculations do not account for factors such as expense ratios, exit loads, taxes, or market fluctuations, so the results should be treated as indicative rather than guaranteed.
An SIP return calculator helps you estimate the future value of your SIP investments based on your monthly investment amount, investment tenure, and expected rate of return. It enables better financial planning by showing the total invested amount, estimated returns, and projected maturity value.
Key benefits of using an SIP calculator include:
The results provided by an SIP return calculator are estimates and should be used for planning purposes only, as actual returns may vary depending on market performance and fund-specific factors.
An SIP calculator helps you estimate how much your investments could grow over time. It uses a mathematical formula to calculate the potential maturity value of your SIP based on three key inputs:
The SIP calculator formula used to estimate the future value of your investments is shown below:
M = P × ({[1 + i]^n – 1} / i) × (1 + i)
Don’t worry if the formula looks complicated. Let’s understand it with a simple example.
Example of SIP calculation
Let’s say you plan to invest ₹10,000 every month for 12 months and expect an annual return of 13%. Before calculating the SIP maturity amount, we first need to determine the monthly rate of return.
A common mistake is to simply divide the annual return by 12 and assume the monthly return is 1.08%. However, SIP returns are compounded, so this approach isn’t accurate. Instead, the annual return needs to be converted into an effective monthly return using the formula below:
Monthly Return = (1 + Annual Return)^(1/12) – 1
So, for an annual return of 13%:
Monthly Return = (1 + 0.13)^(1/12) – 1 = 0.0102 or 1.02%
This means the effective monthly return is approximately 1.02%, not 1.08%.
Why does this matter? Because when returns are compounded, even a small difference in the monthly rate can significantly impact the final maturity amount. Using the correct monthly rate ensures that the SIP calculator provides a more accurate estimate.
Using the monthly return calculated above:
i = (1 + 0.13)^(1/12) – 1 = 0.0102
Now, substituting the values into the SIP formula:
M = 10,000 × ({[1 + 0.0102]^12 – 1} / 0.0102) × (1 + 0.0102)
This gives an estimated maturity value of approximately ₹1,28,300 after one year.
Keep in mind that an SIP calculator provides an estimate based on the return rate you enter. Actual returns may be higher or lower depending on market conditions and the performance of the mutual fund you invest in.
The figures shown are for illustrative purpose only
Using the SIP calculator is simple and can help you estimate your investment value in just a few steps:
The calculator is an aid, not a prediction tool. It may provide only an indicative picture.
Using Bajaj Finserv AMC’s SIP calculator, investors can estimate the potential value their monthly SIP may accumulate over time by entering the investment amount, expected annual return, and investment duration.
Kavya from Jaipur has recently started working and earns around ₹40,000 per month. She decides to invest ₹2,500 every month for 5 years, assuming an annual return of 10%. Over this period, her total investment would be ₹1,50,000, which could grow to approximately ₹1,95,206.
Rohan from Pune earns around ₹90,000 per month and wants to invest regularly for his future goals. He chooses a monthly SIP of ₹8,000 for 8 years, with an expected annual return of 12%. His total investment of ₹7,68,000 could grow to around ₹12,92,213.
Ayesha from Bengaluru has a monthly income of about ₹2,00,000 and wants to build a larger long-term corpus. She invests ₹20,000 every month for 10 years, assuming an annual return of 13%. Her total investment of ₹24,00,000 could grow to approximately ₹49,33,613.
These examples show that SIPs can be planned according to different income levels and financial goals. Investors can start with an amount that suits their budget and adjust the SIP amount or investment period to see how the estimated value changes.
The figures shown are for illustrative purpose only
Bajaj Finserv AMC’s SIP calculator offers several advantages that can help you plan your investments more effectively:
A Systematic Investment Plan (SIP) allows investors to invest at regular intervals based on their preference and financial comfort. The frequency options generally include daily, weekly, monthly, and quarterly contributions. Each option offers a different level of flexibility and depends on the investor’s cash flow and investment approach.
The choice of SIP frequency should be made based on personal financial goals, investment capacity, and comfort level. Regular and disciplined investing over time can help in systematic wealth creation.
| SIP for 1 Year | SIP for 2 Years |
| SIP for 5 Years | SIP for 10 Years |
| SIP for 20 Years | SIP for 25 Years |
Both SIP and lumpsum calculators help estimate potential mutual fund returns, but the right one depends on how you plan to invest:
| Basis | SIP calculator | Lumpsum calculator |
| Investment style | Regular investments over time | One-time investment |
| Best suited for | Monthly or periodic investing | Investing a large amount at once |
| Key input | SIP amount, tenure and expected return | Investment amount, tenure and expected return |
| What it estimates | Total invested amount, estimated returns and maturity value | Estimated returns and maturity value |
| Market timing | Helps reduce timing risk through regular investing | Invests the full amount at one market level |
| Useful when | You want to build wealth gradually | You already have a surplus amount to invest |
| Calculator to use | Use when investing every month | Use when investing a single amount |
Starting an SIP with Bajaj Finserv AMC can be a wise decision for those looking to grow their wealth steadily over time. Here’s a breakdown of the simple steps to get started:
Begin by setting a clear investment goal. This helps in aligning your investment strategy with your financial objectives and risk tolerance. Whether it’s saving for a house, retirement, or education, having a defined goal will keep you focused on the long-term benefits of your investment.
Once you’ve established your investment goal, research and analyze various mutual fund schemes. Consider factors such as investment objectives, expense ratios, and risk levels. Seek advice from financial experts or advisors if needed to select the scheme that best suits your investment goals.
Before investing in any mutual fund scheme, it’s mandatory to complete the Know Your Customer (KYC) verification process as per regulatory guidelines. This involves submitting necessary documents such as identity proof, address proof, and photographs to verify your identity and address.
Once KYC is completed, fill out the SIP application form. The form typically requires personal information, bank details, investment amount, frequency of investment, and duration of the SIP. You can choose to fill in the form online or offline, as per your convenience.
After filling out the application form, set up the SIP by authorizing the bank to debit the specified amount from your bank account at regular intervals. This can be done through net banking or by providing standing instructions to your bank. Ensure that you have sufficient funds available in your bank account on the SIP debit date to avoid any interruptions in your investment plan.
While most SIPs allow for a minimum investment of ₹1,000, some will also allow you to invest as little as ₹500 per month. The specifics of the minimum investment amount can vary from one fund to another.
The maximum tenure of an SIP varies but can typically extend for many years, even decades.
To use an SIP mutual fund calculator, enter your monthly investment amount, expected rate of return, and investment duration. The monthly SIP calculator will then estimate the future value of your investments based on these inputs. This allows you to see how your regular contributions may grow over time and helps you plan effectively for your financial goals.
Yes, you can modify your SIP amount, increasing or decreasing it as per your income and expenses. However, the exact modification process will depend on the fund house that you have invested in. In many cases, you will need to cancel your ongoing SIP and start a new one for the modified changed amount.
Yes, SIPs can be renewed. If your SIP has a fixed tenure, you can start a new one or extend it by setting up a fresh mandate with your mutual fund provider.
Missing an SIP installment won’t result in penalties, but your bank may charge a failed transaction fee. If multiple SIPs bounce, your SIP mandate may be canceled by the fund house.
SIPs and mutual funds are interconnected. SIP is the mode of investment, whereas mutual funds are the investment avenue. SIP is a way of investing in mutual funds in regular installments. Mutual funds themselves are investment products that pool money from investors to invest in stocks, bonds, or other assets.
This means that an individual is investing ₹1,000 at regular intervals in a mutual fund scheme for 10 years. Let’s assume that the investor has chosen a monthly SIP of ₹1,000. If the fund yields a return of 12% per annum, the investor could earn ₹2.32 lakh. An SIP calculator can help you estimate* this.
At an expected 12% return, a ₹3,000 monthly SIP for 5 years may grow to around ₹2.47 lakh.
*This example is for illustrative purposes only. Mutual fund returns are not guaranteed and the rate of return depends on market conditions.
A ₹1,000 monthly SIP for 5 years with a 12% annual return could grow to about ₹82,000.
*This example is for illustrative purposes only. Mutual fund returns are not guaranteed and the rate of return depends on market conditions.
Most SIP calculators do not directly factor in inflation. Investors may have to adjust manually for a more realistic outlook.
Selecting a mutual fund depends on factors like your investment horizon, financial goals, and risk appetite.
Yes, SIPs can usually be paused or stopped by submitting a request to the fund house or through your investment platform.
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The calculator alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. This tool is created to explain basic financial / investment related concepts to investors. The tool is created for helping the investor take an informed investment decision and is not an investment process in itself. Bajaj Finserv AMC has tied up with AdvisorKhoj for integrating the calculator to the website. Mutual Fund does not provide guaranteed returns. Also, there is no assurance about the accuracy of the calculator. Past performance may or may not be sustained in future, and the same may not provide a basis for comparison with other investments. Investors are advised to seek professional advice from financial, tax and legal advisor before investing in mutual funds.
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Our Investment Philosophy reflects what we, as an organisation, believe will generate a good return on equity investment for our investors in the long term. It dictates our goals and guides decision making.
Alpha (a) is a term used in investing to describe an investment strategy’s ability to beat the market.
Alpha is thus also often referred to as excess return or the abnormal rate of return in relation to a benchmark, when adjusted for risk. Essentially, it means doing better than the crowd without taking disproportionate risk.
Collecting superior information
Analysts and portfolio managers strive to collect superior information about the business and the management of the company. They try to generate superior earnings forecast and the balance strength of the company and the industry, thereby trying to 'beat the market' on information edge. This is an important source of alpha for an investor. However, over the years, retaining the information edge has become more difficult and expensive. With a whole lot of investors trying to collect superior information, how can an investor be sure to continuously have accurate and material information about the companies, ahead of others, all the time?
Processing information better
Even if you don't have material information earlier than the crowd, you can still generate better outcomes if you are able to process this information better. Investors develop models and algorithms with enhanced predictive powers to forecast the next move. Fund managers who invest based on some pure formal analytical models are quantitative managers. Here, the goal is to try and beat other investors based on the sophistication of procedures or analytics. The analytical edge can be quite useful until it gets copied by many, and then it may stop generating superior returns.
Exploiting behavioural biases
As the name suggests, this edge is achieved by superior behaviour in reacting to the inputs available to maximise alpha. Modern finance assumes people behave with extreme rationality. However, researchers in behavioural finance have shown that this is not true. Moreover, these deviations from rationality are often systematic. Behavioural managers try to exploit situations where securities are mispriced by the market because of behavioural factors. At Bajaj Finserv AMC, we endeavour to combine the best of these edges.
