SIP: How to become crorepati

How SIP calculator works: Find out how much to save to become a crorepati

Crorepati Calculators: To start investing in equity mutual funds, one is often asked to save through SIP. The systematic investment plan (SIP) can be monthly or quarterly or at any fixed interval and works better in the case of equity mutual funds (MFs).

Investing using the SIP mode helps to keep the average cost of MF units low and also helps avoid the temptation to time the market. SIP suits long-term goals such as children’s education, marriage or for own retirement. But, before one starts a monthly SIP, the investor would want to know as to how much will the final amount become. SIP calculator can be of use and help the investor decide how much should he or she save to reach his/her goal of Rs 1 crore or a higher amount.
How SIP calculator works

SIP calculator is essentially a tool that helps to calculate the maturity value of a series of payments for a specific period at an assumed growth rate. The SIP calculator comes handy for an investor looking to save through mutual funds and want to know how much the total savings will become after a certain period.

For example, one may want to know how much will the corpus become after 15 years if a fixed amount of Rs 3,000 is invested every month at an assumed rate of growth of 12 per cent per annum. Therefore, to use a SIP calculator, one needs to have 3 things —

• A time period
• Amount of regular investment and
• The assumed rate of growth

There are several online SIP calculators available on the Internet and many of them can be found on the mutual fund websites. Here are 5 different versions of SIP calculators to choose from:

1. In most of the mutual fund SIP calculators, you need to input the three fields — Monthly savings amount, time period in years or in months and the assumed growth rate. For example, if you want to use the SIP calculator HDFC mutual fund, which can be accessed at the link (https://www.hdfcfund.com/learn/sip), you need to enter these three fields to arrive at the maturity value.

Illustratively, monthly SIP of Rs 5000 for 20 years can get you about Rs 50 lakh at an assumed growth rate of 12 per cent per annum.

2. In some of the SIP tools such as (https://www.mutualfundssahihai.com/en/calculators), there could be a field for quarterly payments as well.

Illustratively, quarterly SIP of Rs 5000 for 20 years can get you about Rs 16 lakh at an assumed growth rate of 12 per cent per annum.

3. In addition to calculating the final amount, some calculators may have the option to find the SIP amount required to save a certain amount. There is a crorepati calculator as well which can tell you how much to save for becoming a crorepati. If your goal is to save Rs 1 crore after 15 years, the tools can help you arrive at the monthly SIP amount. To use such a tool, you may access SIP Calculator Axis bank (https://www.axisbank.com/retail/calculators/sip-calculator ) or the SBI SIP calculator (https://www.sbimf.com/en-us/financial-planning-calculators/systematic-investment-planner)

4. In a few SIP calculators such as , there is an option for Step-Up of monthly savings. If you wish to increase your monthly SIP amount every year, this SIP calculator UTI MF can be of use to you. (https://www.utimf.com/mutual-fund-calculator/sip-calculator)

5. Some SIP calculators will also give you the option to adjust the corpus with inflation. By entering an assumed inflation figure, you can actually come to know how much the worth of the final amount is as the purchasing power of rupee falls over time due to inflation.