DSP SIP Calculator
Our DSP SIP calculator is an interactive tool that can help you understand the future value of your SIP investments. With the SIP calculator, you can calculate the SIP amount you need to reach your financial goals. All you need to do is enter the amount you wish to invest, your expected annual return, and investment tenure. The calculator will use the details and give you the future value of your SIP investments in just a few seconds.
SIPs suit beginners because you don’t need a lot of money to start one. You can start an SIP in a mutual fund for as low as ₹500 and you can choose to invest every week, month, or year. You can also pause or withdraw most of your SIPs anytime you want. SIPs are convenient and make you a disciplined investor.
How Does The DSP SIP Calculator Work?
The DSP SIP calculator works based on the formula mentioned below.
where:
FV is the future value of your investment
P is the monthly investment amount
r is the monthly rate of return, which is the assumed annual return divided by 12
n is the total number of months or the investment duration
Each month’s instalment is counted at the start of the month, which is why the formula ends with × (1 + r).
Example
You are thinking about investing ₹2,500 every month for 5 years. You are expecting an annual return rate of 8%. Here's how you can calculate the future value of your investments.
Converting the annual return rate to a monthly rate: r = 0.08/12 = 0.00667
Calculating the total number of months: n = 5 x 12 = 60
FV = 2,500 × [((1 + 0.08/12)^60 − 1) ÷ (0.08/12)] × (1 + 0.08/12)
FV = 2,500 × 73.9667
FV = ₹1,84,917 (approximately)
How Should You Use The DSP SIP Calculator?
The DSP SIP lets you calculate the SIP returns of mutual fund schemes. Now, follow the below steps to calculate the SIP returns.
- Type in the amount you wish to invest through SIP.
- Enter the rate of return you wish to earn from your investments.
- Then, enter the number of years you would like to continue your SIPs.
The above details are all the calculator needs to tell you the total wealth earned by your investment, total investment amount, and estimated returns. Thus, the calculator helps you know the future value of your investments.
Example
Miss Jazz wishes to invest in the down payment of her house. She wants to invest ₹11,500 every month through SIP for 8 years. She expects a return rate of 10%.
We can calculate the future value of Jazz’s investments by using the above formula.
As the first step, we need to convert the annual return rate to a monthly percentage: r = 0.10/12 = 0.00833
The next step is to calculate the total number of months: n = 8 x 12 = 96
FV = 11,500 × [((1 + 0.10/12)^96 − 1) ÷ (0.10/12)] × (1 + 0.10/12)
FV = 11,500 × 147.39925
FV = ₹16,95,091 (approximately)
So, if Ms. Jazz invests ₹11,500 every month for 8 years with an annual expected return rate of 10%, her SIP investments could potentially grow to ₹16,95,091. This amount would be sufficient for her to put down the down payment for the house.
Benefits Of Using The DSP SIP Calculator
Our DSP SIP calculator provides the below advantages.
- The SIP calculator helps identify the right mutual fund scheme by providing a definite answer on expected returns.
- By using the SIP calculator, you are likely to be well-informed about the expected returns and maturity value of your SIP investments.
- The calculator saves you a lot of time and effort when calculating expected returns.