SIP (Systematic Investment Plan) - Invest in SIP : ICICI Bank (2024)

A Mutual Fund (MF) calculator is an online financial tool that helps you, the investors, understand the final value of your investments. You only need to put the fundamental details of your investment, and you will get the final return amount using this calculator. Knowing the maturity amount before investing is a smart step in any investment as it helps you plan better and invest to meet your financial goals.

Benefits of using a Mutual Fund Calculator

Here are some of the key advantages of an MF calculator –

1. Using an MF calculator is very easy. The user interface is simple, and anyone can navigate and use it without much trouble.

2. You can use the calculator from anywhere and get instant results.

3. The results provided by this calculator are accurate, so you can make the right investment decision.

4. It gives you the option of knowing your maturity for a one-time investment and a SIP investment. Also, you get to know the results at different interest rates, which makes it easier to compare and come to a better conclusion.

5. Knowing your maturity amount helps in your planning of future financial investments.

How does a Mutual Fund Return Calculator work?

A Mutual Fund Return Calculator is a financial tool which helps estimate investment returns easily. Using a simple algorithm, it calculates potential returns based on your inputs. This user-friendly tool eliminates lengthy manual calculations, making it accessible to all investors. Whether you are considering Systematic Investment Plans (SIPs) or lump-sum investments, the calculator helps you check the expected future value of your mutual fund investment. It's a handy tool that simplifies the process, giving investors a quick and convenient way to assess their potential returns.

Now, to use this calculator, you need to enter the following three values to get the results:

• Investment amount
• Duration of the investment
• Estimated rate of return

Mutual Fund Calculation Formula

The Mutual Fund Calculator uses the following formula:

The formula for Lump Sum Investments:

Future Value = Present Value (1 + r/100)^n
Where,
r - The estimated rate of return
n - The duration of the investment

The formula for SIPs:

FV = P [(1+i)^n-1]*(1+i)/i
Where,
i - The compounded rate of return
n - The investment duration in months
P - The amount you invest monthly through SIP
FV - The future value of the investment

How to use a Mutual Fund Calculator

For lump sum mode of investment

• Step 1: Select the option of one-time investment
• Step 2: Choose your target or investment amount
• Step 3: Enter your initial investment amount
• Step 4: Select the duration
• Step 5: Enter the expected rate of return.

After entering all the values, click ‘Calculate’. The calculator will instantly display the estimated maturity value or the required investment amount to achieve your goal.
For example, If you invest Rs 5,00,000 lump sum for 10 years at 12% per annum, you will receive Rs 15,52,924 on maturity.

For SIP mode of investment

Follow the below steps to calculate the return value of your investment through SIP.

• Step 1: Select the option of SIP
• Step 2: Choose your target or investment amount
• Step 3: Enter your investment or SIP amount
• Step 4: Select the SIP duration
• Step 5: Enter the expected rate of return.

After entering all the values, click ‘Calculate’. The calculator will display the estimated maturity value or the required investment amount to achieve your goal.

For example, If you invest Rs 10,000 per month for 5 years at 12%, you will receive Rs 8.11 lakh on maturity.

Now, investing Rs 6 lakh as a lump-sum amount and using the same amount as SIP gives two different returns. Hence, it is very important to be aware of the difference in cumulative results of the two investment processes.

Ending note

The ultimate goal of any investment is to get the best returns, and an MF investment is no different. Having said that, since there are two ways to invest here, and both offer different outcomes, an MF calculator can help you find the right option.