Kotak SIP Calculator
Our Kotak SIP calculator helps you see how small monthly investments can benefit your portfolio over time. With the SIP calculator, you only need to enter your total investment amount, your investment horizon, and the expected rate of return per annum. The calculator will use these values to give an approximate value at maturity. This will help you understand how much your investments can grow.
SIPs (Systematic Investment Plans) let you invest in mutual funds at regular intervals. You can start a SIP for as low as ₹500 in any mutual fund scheme and gradually build your wealth over time. SIPs help shield your investments from short-term volatility in the stock market. They are used by new and experienced investors alike.
How Does The Kotak SIP Calculator Work?
The Kotak SIP calculator works based on the below formula.
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 wish to invest ₹25,000 every month for 6 years. You expect a return rate of 10%. Here's how the future value of your SIPs will be calculated.
Convert the annual rate of return into a monthly rate: r = 0.10/12 = 0.00833
Calculate the total number of months: n = 6 x 12 = 72
FV = 25,000 × [((1 + 0.10/12)^72 − 1) ÷ (0.10/12)] × (1 + 0.10/12)
FV = 25,000 × 98.9289
FV = ₹24,73,223 (approximately)
How Should You Use The Kotak SIP Calculator?
An SIP calculator requires some inputs to calculate the SIP returns. The Kotak SIP calculator uses the below information:
- You need to enter the monthly installment amount. This is your SIP amount.
- Then, you have to enter the annual return you expect. This is an assumption, not a fixed rate.
- You need to enter the investment duration of your investment.
The calculator calculates the scheme's returns based on the SIP amount, rate of return, and investment period.
Example
Mr. Ian is planning to invest ₹3,000 in a monthly SIP for 8 years. He is expecting a return rate of 12%.
By using the above formula, we can calculate the future value of Ian’s investments.
The first step is to convert the annual rate of return to a monthly rate: r = 0.12/12 = 0.01
The next step is to calculate the total number of months: n = 8 x 12 = 96
FV = 3,000 × [((1 + 0.12/12)^96 − 1) ÷ (0.12/12)] × (1 + 0.12/12)
FV = 3,000 × 161.5266
FV = ₹4,84,580 (approximately)
Benefits Of Using Kotak SIP Calculator
The Kotak SIP calculator helps you make informed decisions and choose better investments. Here are some key benefits of the Kotak SIP calculator.
- The SIP calculator is quick and straightforward in estimating the SIP returns of mutual fund schemes.
- The calculator eliminates the complicated calculation of manually calculating the maturity value.
- Any investor - be it a beginner or seasoned professional, can use the calculator to check the potential returns of their investments.