Use this free moneycontain SIP Calculator and calculate the future value of your investments made through monthly SIP’s or lumpsum investment. This SIP calculator is designed to give you accurate results for both.
Most importantly this a three in one SIP calculator which means now you can calculate monthly SIP return or Lump Sum investment in SIP or both monthly as well as Lump Sum return at once keeping inflation in focus during investment tenure.
You just need to enter the monthly or Lumpsum amount invested, enter expected return, enter investment period(in months) and average rate of inflation during your investment period, it will give you the future value as well as tells you about the wealth gained on investment made.
Update – Both SIP and Lumpsum SIP Calculator has been updated to count in inflation effect/impact on investment. You can also read below about how inflation make impact on investment.
Learn more about reverse inflation and inflation here.
What Is SIP?
In simple terms Systematic Investment Plan popularly known as SIP is a method to invest fixed amount either monthly or lumpsum (onetime) in any mutual fund scheme. By doing systematic investment one can expect the maximum return on invested capital.
An SIP can be as low as ₹500 and can be invested at predefined intervals such as weekly, monthly, quarterly, semi-annually, annually.
The most common SIP’s are monthly SIP and lump sum SIP. This facility is offered by mutual fund companies to investors, in order to invest their money systematically in any given fund.
What Is The Difference Between Monthly SIP And Lumpsum SIP?
What Is Monthly SIP?
Monthly SIP are those in which through monthly deposits of a certain amount you can invest in any mutual fund scheme offered by various Asset management companies(AMC).
The fixed amount of money can be as low as Rs. 500 monthly, which you can invest for certain time period like 1 ,2 , 5, 10 years and more.
What Is Lumpsum SIP?
Lumpsum SIP are those which are invested one time in any mutual fund scheme for a long-term duration. Generally, it is a significant amount that one invest, instead of monthly SIP’s which involves small amount at regular intervals.
So, instead of investing ₹1000 every month in a SIP for 5 Years, you invest ₹60,000 (may be more) at once.
So, this the basic difference between monthly and lumpsum SIP’s.
What Is SIP Calculator?
SIP calculator helps you in calculating the future value of your return through money invested by SIP routes. SIP calculators is a very useful tools for investors, as it tells you the expected return without manual calculation, which is by the way very difficult.
What Is SIP Calculator With Inflation Means?
Many investors who invest money through SIP’S whether lumpsum or monthly, does not count the rate of inflation.
Most first time investor miss this point, they only think, ok this will be the amount i would be getting at the end of my mutual fund scheme.
However, with time the value of money changes, what i means to say the value of Rs.100 after 25 Years would not be the same.
Due to inflation the prices or goods of any economy or country increase over a period of time. Hence you should account inflation while calculating your SIP returns.
To account inflation in your future value investments either drop the expected rate of return on investment, for example, if you are expecting 15% return on your investment you need to subtract the inflation rate for same period.
So, let say the average inflation for last 5 years is 3.5% so instead of taking 15% expected return, you count your return on 12.5%. You can get the inflation rate from here for India.
To find the real interest rate, we take the nominal interest rate and subtract the inflation rate.
Real interest rate = nominal interest rate − inflation rate.
However the above method to calculate the inflation is the basic estimation, as inflation and returns compound the correct way or formula to calculate inflation adjusted return is given below:
Inflation-adjusted return = (1 + Return) / (1 + Inflation) – 1
Applying the formula by using above no.
(1+15%)/(1+3.5%)-1= 11.11%, this is correct return you should expect on your investment post inflation.
Checkout the impact of inflation on your returns as well as your life using moneycontain inflation rate calculator and calculate your future expenses easily.
At the same time there is another method or concept called present value or discounting, this helps you in knowing the (PV) present value of your future investments.
Calculate the present value of your future investment using moneycontain present value calculator.
Learn more about reverse inflation and inflation here.
How SIP Calculator Works?
SIP calculator works on the formula use to calculate future value and compound interest. It is very easy to use the SIP calculator, let us understand by taking an example:
Suppose you want to start an monthly SIP of Rs.1000 in any mutual fund scheme for a period of 15 Years and you expect the return from that scheme to be around 15%(annually). Now how would you know how much you will get after 15 years of consistent SIP deposits?
To solve this you can use moneycontain SIP calculator and get the result easily, below image tells you about the same:
Update – Both SIP and Lumpsum SIP Calculator has been updated to count in inflation effect/impact on investment.
As you can see the SIP calculator shows you the value of your invested amount which is ₹6,76,872 besides this it also tells you the total invested amount which was ₹1,80,000 in above scenario. As well as the total wealth gained on investment made which is Rs.4,96,872.
Apart from this you can also calculate the lumpsum investment made in SIP through the other calculator given below by entering the required field.
As an example suppose you want to invest certain amount at once, for any future purpose. It can be for your children higher education or marriage or buying new home.(you can check moneycontain home loan monthly EMI calculator here)
Let say you deposit a lump sum amount of ₹500,000 in an mutual fund scheme through SIP route for 20 years, expecting an interest rate of 12.5%. Below image shows you the amount you will get after 20 years.
Update – Both SIP and Lumpsum SIP Calculator has been updated to count in inflation effect/impact on investment.
As you can see your 5 lacs investment grown to huge Rs.48,23,146 which is a significant growth. The total wealth gained on the investment is about Rs.43,23,146.
No, we are not done yet this SIP calculator is very unique, other than calculating the monthly sip and lump sum, you can calculate both at once as well.
What I mean is suppose you take a monthly SIP of Rs.2000 in one mutual fund scheme and you also invested the lumpsum amount of Rs.300,000 for the same period (15 years) with an 15% rate of return.
Now this calculation becomes more complex , however by using the above calculator you can find out the future value of your investment for both monthly as well as lumpsum SIP’s.
What Is Monthly SIP Calculator Formula?
The formula to calculate monthly SIP is :
FV = P × ({[1 + i]^n – 1} / i) × (1 + i)
In the above formula –
- FV(future value) is the amount you receive at the end of fund(maturity).
- P is the amount you invest at regular monthly intervals.
- n is the number of payments you have made(installments).
- I is the periodic rate of interest.
As I have already told you the formula looks very mumbo jumbo, specially for a person not from maths or finance background.
What Is Lumpsum SIP Calculator Formula?
The lumpsum sip calculator formula is:
A = P (1 + r/n) ^ nt
In the above lumpsum sip calculator formula:
A= Total Amount Receivable(at the end)
P= Total Amount Invested(initially)
R= Rate of Interest
T= Time(invested period)
N= No. of times the compound interest you receive in a year(yearly, half-yearly, quarterly, monthly)
Whenever you want to calculate your mutual fund return for lump sum SIP’s you can use this formula.
Why Invest In SIP?
This is the most important question anyone would have in his/her mind, let us debunk this through an example:
There are three friends by name Krishna, Dani and Kuldeep after completing their education, they started working in a company. All of them are of same age group and started working at 25, as they were very close friends all of them stayed together and enjoyed their company.
They decided they won’t work till retirement and wanted to open their own organization, but for this they need some capital, therefore all decide to save some money from their salaries and invest that in any mutual fund scheme till they reach 40.
This way they will have some money and together can start a small organization. However, when you are young saving and investing does not look a great idea.
Instead we want to enjoy and spend our money in buying luxury items, branded clothes, or may be in some other thing which we can’t discuss here? . It really takes efforts and patience to save and invest and very few people able to do it.
Mostly we are habitual of instant gratification, But those who do it will live better financial life afterwards. Coming back to these three friends Krishna was determined about his business and he started a monthly SIP with Rs.3000.
Time passed both Dani & kuldeep were busy in their own life, when they reached 30’s one day krishna asked them about their future plan and their savings, dani and kuldeep told their respective situations or say excuses and why they did not started.
Dani realized as most youngster only realize when they either reach their 30’s or in late 30’s, he has to start saving and investing, krishna told him about his SIP of Rs.3000 a month.
Dani thought alright i am late but i can invest more than what krishna is investing so he started investing with Rs.4000.
After 5 Years passed Krishna again pointed them about their future business and plans, dani said oh don’t worry I too started it 5 years back and its even more than what you are investing.
Kuldeep standing nearby felt ashamed for a while and said sorry to both, he promised he will be investing now and much more than both. Kuldeep started Monthly SIP of Rs.7000.
When time came and they reach 40’s all of them decided to withdraw their respective investment and use it to start their dream company.
Keeping above calculation of their investment with time period(years) and taking an average of 12% returns on their investments, below image represent the same:
Below graph shows you the complete picture:
Wooh, Even after investing more than dani and krishna kuldeep left far behind, if you see the total invested amount for all, it is only difference of Rs.60,000 but the amount received at the end to all of them have major difference.
This is what is called as power of compounding the early you start investing the more beneficial it is for you. I hope this gas clear your doubt now on why need to invest in SIP’s.
How Accurate Is Moneycontain SIP Calculator?
It is as accurate as HDFC SIP Calculator on official website, for reference i have taken a snapshot from HDFC monthly sip calculator and used the same values on moneycontain monthly sip calculator, you can see the result for both below:
Update – Both SIP and Lumpsum SIP Calculator has been updated to count in inflation effect/impact on investment.
For lumpsum investment calculation, i have taken a snapshot from SBI mutual fund website and entered the exact value on moneycontain lumpsum investment return calculator you can check the image below to see the result.
You might be thinking why I did that, the simple reason is to be on the safer side, As we are dealing with money and the best one can compare is with the official banking websites, moreover just to let you know there are certain websites which does shows you the wrong results, it is always advisable to compare it with some well-known banking websites to be on safer side.
What is meant by “Rupee Cost Averaging?
Rupee cost averaging is a concept which allows an investor to take advantage of the market volatility. By investing in a SIP, an investor gets more units when the Net Asset Value (NAV) is less and less units when the NAV is high. This brings down the average cost of the units over the long term.
Is Monthly SIP Better Than Lump Sum SIP?
Monthly SIP is better because of the “Rupee Cost Averaging factor”. Rupee Cost Averaging allows an investor to take advantage of the stock market volatility.
Through investing in a SIP, as an investor you will get more units when the Net Asset Value (NAV) is less and less units when the NAV is high. Which brings down the average cost of the all units over the long term investment.
Having said that Lumpsum SIP has its own advantage if you are buying it at the right time in right fund and when the Net Asset Value (NAV) is less which means you will have more units at a particular price and in long duration the NAV will be higher creating a bigger profit.
Other things with lump sum SIP is, there is no headache for every month keeping certain money in your account to maintain the SIP.
Top up SIP is a facility which allows an investor to increase the amount of SIP instalments by a fixed amount at pre-determined intervals.
Top up SIP is a facility in which an investor can increase the amount of SIP instalments by a fixed amount at pre-determined intervals whereas SIP is a facility in which a fixed amount is invested at pre-determined intervals.
When is the best time to invest in SIP?
There is no such thing as best time to invest the earlier you do the best results you will get. Having said that you should invest in a good fund when the NAV is low.
This may happen when there is some kind of bad news floating around (like coronavirus), this does have a huge impact on market and if you are investing for long term horizon than you do need to worry about the short term volatility in the market, things will get sorted till that time.
Can I miss an SIP payment?
Yes, you can miss your payment and still your account wouldn’t be deactivated. There are options to pause your payments in various mutual funds.
How do I start my SIP investment?
Choose any good mutual fund scheme check its historical returns, see which all sectors are involved and their weightage and start investing. By the way you can open a free mutual fund account here if interested.
My Opinion On Monthly Vs Lumpsum SIP:
I hope till now you have the basics understanding of the SIP calculator and its use. This SIP calculator is quite helpful if you are thinking of making any future investment plans.
I want to quote John Maynard Keynes, he said “The importance of money flows from it being a link between the present and the future”.
John Maynard was a British economist, whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.
As an investor you should know the (TMV) “time value of money” the value of money does not remain the same across time. Meaning, the value of Rs.1000 today is not really Rs.1000, 2 years from now. Oppositely, the value of Rs.1000, 2 years from now is not really Rs.1000 as of today.
Whenever there is motion of time, there is an element of opportunity. Money has to be accounted or adjusted for that opportunity.
What is the one thing that you want when you get old? Time, so that you can correct and reverse the mistakes you did in past.
Time is equal for all of us on this planet at least? The more you invest your present time in right direction and decision, better will be your future.
Do start investing today, if you are not because the people who wait for right time, it does not come simply.
Are you looking to invest in fixed deposits than do check moneycontain FD Calculator here. Also, see highest interest rate offering bank for fixed deposits(FD) in India.
Instead of Monthly SIP, you can also opt for more safer method also known as monthly recurring deposits or RD, checkout highest RD Interest rates offered by banks in India in 2021 and calculate the returns for your future value of RD, using moneycontain monthly RD calculator with inflation here.
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Note: Please do not take this as any recommendation, to trade or invest. This is just for reference, to make you understand more about the Monthly/lumpsum SIP calculator and its importance, under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset.
Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only. All investments are subject to risks, which should be considered prior to making any investments.
