How to use Mutual Fund SIP calcultor
Mutual Fund SIP Calculator calculates the overall amount returned if someone invests a small chunk of money periodically. In order to use this calculator, you need to know three parameter.
- Monthly Investment Amount – It is the amount of money that you have decided to invest in mutual fund on montly basis. For example, If I have decided to invest 100 $ per month, You need to fill 100 in the input field of the investment amount.
- Investment Tenure – It is the tenure of your investment i.e total time you will remain invested in mutual fund. You can select investment time from the dropdown.
- Expected rate of Return – It is the rate of return that mutual fund provides in a given period of time. You can get the rate of return from mutual fund official website.
Once you have decided on these three parameters, you have to click on the calculate button and you will get the return result
How Mutual Fund SIP calculator works
We use future value calculation formula to calculate the return. The formula is given below.
Future Value = P * (R * (1+i)n-1) * (1+i) / i
Future Value = The total wealth created
P = SIP amount
i = Compound rate of interest. As the returns are compounded for every investment instalment, monthly SIP will be compounded as: i/12.
Disclaimer – Mutual funds are subjected to market risk. Kindly, invest carefully.
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