LIC SIP Calculator
Our LIC SIP Calculator is a tool that will help you calculate your desired financial corpus in the future and how much investment will it take for you to achieve your desired goal. It is important to note that the actual returns on the SIP calculator might vary at times due to several factors depending on the volatility of the financial market.
Most times, people confuse mutual funds and SIPs, thinking they are the same thing. The fact is, you can invest in mutual funds in two ways - Systematic Investment Plans (SIPs) and Lumpsum method. In an SIP, an investor has the option to invest small amounts at regular intervals for a defined tenure with the aim of building wealth over the long term. Regular investment intervals can be either weekly, monthly, or quarterly, making it easier for investors to invest in mutual funds.
How Does Our LIC SIP Calculator Work?
The formula for calculating the future value of investments through an SIP can be expressed as follows:
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
Let's say, you invest ₹1,000 every month in an LIC SIP for a tenure of one year and assume an annual return of 12%. The future estimated returns will be as follows:
Monthly returns = 12%/12 = 0.01
Now, FV = 1,000 × [((1 + 0.12/12)^12 − 1) ÷ (0.12/12)] × (1 + 0.12/12)
FV = 1,000 × 12.809
FV = ₹12,809 (approximately)
How Should You Use The LIC SIP Calculator?
The LIC SIP Calculator is one of the easiest tools you can use in calculating the estimated return amount just by entering a few details. Below are the basic details required to get the return value.
- The monthly amount you are willing to invest
- The annual return you expect from the mutual fund (an assumption, not a fixed rate)
- The period for which you are willing to stay invested
Once you have given the details, the maturity value will be reflected just by a click.
Example
Ms. Anita wishes to invest ₹5,000 every month and expects an annual rate of return of 12%. She stays invested for 10 years. So, here's how the values will be calculated:
Firstly, convert the annual rate of return to a monthly rate: r = 0.12/12 = 0.01
The total number of months: n = 10 x 12 = 120
Now, let's put the values in the formula:
FV = 5,000 × [((1 + 0.12/12)^120 − 1) ÷ (0.12/12)] × (1 + 0.12/12)
FV = 5,000 × 232.339
FV = ₹11,61,695 (approximately)
So, if Ms. Anita invests ₹5000 every month for 10 years with an expected annual return of 12%, her SIP investments could potentially grow to approximately ₹11,61,695.
Benefits Of Using LIC SIP Calculator
There are several benefits of using the Koshex LIC SIP calculator and below are some of them.
- An SIP calculator helps you set realistic financial goals by giving you a clear picture of your potential returns.
- With the calculator's insights, you can adjust your monthly investment amount, duration, or expected returns to align with your financial goals and risk tolerance.
- Seeing the future value of your investments can motivate you to stay committed to your financial plan.