Starting a SIP in your early years is a wise decision. It is a way where you invest a particular amount of money in a mutual fund at regular intervals. These intervals can vary from weekly, monthly to quarterly. This is where the Step Up SIP calculator comes into play because as your income grows so should your savings.
Compounding is a great way to build your wealth to fight inflation. Our Step Up SIP Calculator will help you gain an idea of your potential returns and maturity value.
Features of the Step-Up SIP Calculator
SIP stands for Systematic Investment Plan it is a method of investing in mutual funds wherein there are a number of tax benefits. A step-up SIP calculator is an online calculator tool where you can gain returns on the net worth values.
Now, it is not always accurate as there are numerous other factors that must be taken into account, for example, inflation, trends of the economy and so on. But yes, you will get an estimate and that estimate should be the real cash figure or just a little off.
- For the public it is completely free of cost. You can use it from any mobile or desktop anywhere at any time.
- Investors will gain knowledge on how their savings will make profits in future and how they should manage their wealth.
- You can use this calculator to see whether the particular mutual fund you have selected for investment is suitable for you.
Working of the Step-Up SIP Calculator
The step up SIP calculator takes in the first SIP amount, step up which is the increase in the amount in absolute terms every year, expected rate of return and time period. Out of this, the calculator will come up with an estimation of the matured amount.
We use the formula given below to calculate SIP returns:
P × ({([1 + i] ^n) – 1} / i) × (1 + i)
Here,
- P is the initial SIP amount.
- i is the rate of return to be expected on the investment.
- n is the number of months you want your SIP to continue.
Let me explain this with an example:
Suppose, your initial SIP amount is Rs.12,000 with the annual step up of 10% for over 10 years with the interest rate of 12%.
At the end of 10 years, your total investment would amount to Rs.22,94,989 along with wealth gain of Rs.1754202. This means your maturity value would be around Rs.4049191. You can find all of this information and graphs through our Step Up SIP Calculator.
How to Use Step Up SIP Calculator?
Just follow the steps mentioned below to measure the returns on your SIP:
Step 1: Enter the initial SIP amount that you will start investing at fixed intervals.
Step 2: Enter the step up that you would want to extend the SIP percentage every year.
Step 3: Indicate the number of months or years duration in which you want to do your SIP.
Step 4: Provide the expected Return on investment in terms of the percentage. This is usually based on the past performance of the mutual funds.
Once you have filled in the information provided, review the information to ensure everything is correct. Finally, click the “Calculate Now” button. You will get your total investment, maturity value, and wealth gain as the outcome.
FAQ (Frequently Asked Questions)
Q1, Is it possible to Step Up an existing SIP?
Yes, it is entirely possible to step up an existing SIP. You can do that with the help of any reputed investment platform and add the step-up percentage to the existing SIP.
Q2. How to decide the Step Up percentage or amount?
You can easily decide the step-up percentage or amount by evaluating your income growth, inflation rates, and personal financial goals. The choice ultimately depends on you.
Q3. Is adding a Step up to SIP necessary?
In this economy, yes adding a step up in your SIP is necessary. By doing this, you align your investments with your income growth and can plan an early retirement!