India 
SIP Calculator
Franklin Templeton’s SIP (Systematic Investment Plan) calculator is a tool that allows investors to estimate the future value of regular investments in mutual funds, by inputting details like monthly SIP amount, investment duration, and expected returns.
What is an SIP Calculator?
A systematic investment plan calculator is a simple online tool that helps investors calculate the potential returns from their systematic investment plan or SIP investments in mutual funds. SIPs allow investors to invest small, regular amounts in mutual funds at fixed intervals, usually monthly or quarterly. Since SIPs involve numerous small investments over several years, manually calculating the expected returns can be complicated.
An SIP calculator makes this calculation effortless. It allows users to enter basic details like the amount invested in each period, the investment duration or tenure, and an estimated annual rate of return from the mutual funds. By inputting just this basic information, the SIP calculator uses mathematical formulae to forecast the total value of the SIP investment at regular intervals and maturity. This includes estimating both, the returns earned over the investment period and the total original capital invested through SIPs.
The SIP calculator provides a straightforward way to understand how much the investment may be worth in the future. This helps investors assess if their goal of creating a certain corpus is achievable through SIPs. It also allows comparing returns from different mutual funds to choose appropriate funds for one's goals and risk profile.
How can an SIP Return Calculator help you?
An SIP return calculator can assist investors in the following ways.
- Estimating future returns: The calculator provides an estimated value of the returns that can be generated on one's SIP investments over different periods. This gives an idea of how much the investment will grow and if it can help achieve one's financial objectives.
- Planning investments: By adding details like the amount to be invested regularly through SIPs and the expected rate of return, the calculator shows the probable corpus that will be accumulated at regular intervals and at different timelines like 5, 10 or 15 years. This helps in properly planning one's investments.
- Comparing investment options: The SIP return calculator allows comparing returns projected from different mutual fund options. This facilitates choosing funds that best suit one's risk appetite and time horizon. Monitoring investments: One can use the calculator regularly to track if their SIP investments are on track to generate the targeted returns to meet goals. This helps monitor investments periodically.
- Assessing inflation impact: SIP calculators provide the flexibility to factor in estimated inflation rates. This gives a real view of how much more one may need to invest regularly to attain the same inflation-adjusted target amounts.
How does a Systematic Investment Plan Calculator work?
An SIP calculator works using mathematical formulae to project the future value of one's SIP investments based on certain inputs like the monthly investment amount, expected rate of return and number of investment periods or years. One of the key inputs is the monthly SIP amount that the user regularly contributes. This acts as the principal investment that compounding works on.
The user also needs to specify the anticipated annual rate of return from the mutual fund, which the calculator uses to calculate periodic and annualised returns. Though past returns may not be indicative of future performance, this provides an estimated growth projection. Next, the tenor or duration of the SIP needs to be entered in years to calculate returns over different periods. SIP calculators provide estimates for 5, 10, 15, and 20 years to help investors choose suitable timelines.
SIP calculators also allow selecting a monthly or quarterly frequency of SIP investments, with monthly being more common. The period is the number of months or quarters over which the returns are computed. Using the inputs, the SIP interest calculator applies the compound interest formula to calculate the future value. It totals the returns generated each period on the principal added through SIPs as well as the preceding periods' returns. This gives the projected corpus at regular intervals.
Let’s understand SIP Calculators with a live example:
| Particulars | Amount (INR) |
| Monthly Investment Amount in SIP | ₹ 25,000 |
| Investment horizon (Tenure of the SIP investment) | 10 years |
| Expected annual rate of return | 12% |
SIP Calculator Formula: Value of investment on maturity = P * ((1 + r)^n – 1)/r) * (1 + r * type)
In the above formula:
| P | Monthly Investment Amount in SIP | ₹ 25,000 |
| r |
Expected Annualised Rate: 12% Monthly rate of return i.e. Rate = ((1+12%)^(1/12)-1) |
0.95% |
| n | Total number of months across which you are investing i.e.10 years * 12 | 120 |
| Type | The number 0 or 1 indicates when payments are due. In this case, 1 is assigned presuming payments are made at the beginning of the month. |
Basis the above formula:
| Projected value of investment on maturity (A) | ₹ 56,00,987 |
| Total amount invested (B) | ₹ 30,00,000 |
| Potential returns on SIP (A-B) | ₹ 26,00,987 |
Based on the inputs and calculation formula, the SIP calculator provides the potential corpus generated, the total investor contribution, and the estimated returns over the SIP tenure.
You can use this tool to simulate various combinations of contribution frequency (daily, weekly, monthly, or quarterly), investment duration, and expected returns—helping you better understand how to reach your financial goals.
In this example, a total contribution of ₹30 lakhs over the investment tenure grows to ₹58.08 lakhs, nearly doubling in value over a 10-year period.
Below are a few more illustrations based on the SIP calculator formula explained above:
| Monthly SIP Amount | Investment horizon | Expected rate of return | Total amount invested | Projected value of investment on maturity | Potential returns |
| ₹ 5,000 | 10 | 12% | ₹ 6,00,000 | ₹ 11,20,179 | ₹ 5,20,179 |
| ₹ 10,000 | 10 | 12% | ₹ 12,00,000 | ₹ 22,40,359 | ₹ 10,40,359 |
| ₹ 25,000 | 10 | 12% | ₹ 30,00,000 | ₹ 56,00,987 | ₹ 26,00,987 |
| ₹ 50,000 | 10 | 12% | ₹ 60,00,000 | ₹ 1,12,01,794 | ₹ 52,01,794 |
The expected rate of return is in line with AMFI Best Practices Guidelines Circular No. 109 / 2023-24 dated November 01, 2023 and circular issued thereafter.
Past performance may or may not be sustained in future and is not a guarantee of future returns.
Advantages of an SIP Calculator
- SIP calculators enable investors to estimate future returns from their SIPs under different scenarios. By inputting varying rates of assumed return, the calculator allows comparing the growth prospects that can be achieved through SIP investments in a mutual fund.
- An SIP return calculator aids in effective financial planning. It allows inputting varying monthly SIP amounts and durations to estimate the potential corpus that can be accumulated. This helps set realistic savings goals through SIPs and plan out monthly investments required to achieve different targets over time. Comparing outputs for diverse timelines from 5-20 years assists in choosing the most suitable duration for one's requirements.
- An SIP calculator also simplifies comparing returns projected from investing in different mutual fund options. This facilitates selecting the most appropriate investment avenue based on the target amount needing to be accumulated. It allows filtering out funds less likely to provide the returns required to meet one's monetary goals within the planned tenor.
- SIP interest calculators facilitate periodic monitoring of investments. One can track if their actual returns are commensurate with estimates from the calculator. This helps assess if additional investments may be needed to achieve the targeted corpus or if the SIP may require tweaking.
How to use Franklin's SIP Calculator?
Franklin Templeton offers an online SIP calculator that is simple to use.
- Choose between ‘I want to invest’ or ‘I know my goal’ option. The former is useful if investors have a monthly investment amount in mind and the latter is useful if they have a goal in mind.
- If opting for the ‘I want to invest’ option, choose the monthly investment amount, number of years, and expected rate of return to see the results.
- If opting for the ‘I know my goal’ option, input the goal amount, number of years, and expected rate of return to see the results.
