What is a SBI SIP Calculator?
SBI SIP Calculator is an online tool that helps in estimating the returns from a SIP investment. The SIP calculator works on the inputs given like investment amount or target amount, expected rate of return, investment tenure, and step-up rate. Scripbox’s SBI SIP Calculator provides output in both graphical and tabular format. The SBI SIP calculator clearly shows the investment amount, potential capital gains and estimated maturity amount.
The SBI SIP Calculator works on the investment amount and target amount approach. The investment amount approach is the most used one. Here, the investors enter how much they want to invest and the tenure, expected rate of interest and step up percentage. On the other hand, the target amount approach estimates the current investment amount every month based on the target provided by the investor.
Scripbox’s SBI SIP calculator estimates the return in terms of maturity amount based on three different growth scenarios. The SBI SIP Calculator only gives an estimate based on the inputs provided and doesn’t guarantee any returns. The performance of a mutual fund affects its return which can be higher or lower than the estimate provided by SBI SIP Calculator.
How does the SBI SIP Calculator work?
SBI SIP calculator estimates potential return using the compound interest formula. The SBI SIP calculator considers the number of times compounding is applicable and calculates the potential returns. Also, the SBI SIP calculator requires inputs from the user. Hence, the user has to enter the monthly amount they want to invest, the duration of the investment (in years) and the expected rate of return on the SIP.
The online SBI SIP calculator will automatically calculate the maturity amount and the wealth to be gained from the mutual fund investments. Moreover, One can choose to enter the target amount matching their financial goal and reverse calculate the monthly amount. Therefore, the SBI SIP calculator will calculate the monthly SIP amount to be invested for the given tenure and growth rate.
How is SBI SIP return calculated?
SBI SIP return can be calculated using different methods. They are absolute return, annualized returns, CAGR, and XIRR. However, to estimate SIP returns, CAGR is the most effective method.
CAGR means Compound Annual Growth Rate. CAGR is the rate at which an investment grows each year for the entire tenure of the investment. The below is the formula for calculation of CAGR:
CAGR = (ending value/beginning value) ^ (1/number of years or months) – 1*100
Ending value is the NAV at the time of withdrawal,
Beginning value is the NAV at the time of investment.
A number of months or years is the tenure of the investment.
Ms Diksha has invested INR 5,00,000 (INR 20,000 a month for five years) in a mutual fund when the NAV is INR 31. At the time of withdrawal after five years, the NAV is INR 50. Using the CAGR formula, we can estimate SIP returns for Ms Diksha.
CAGR = (ending-value/beginning – value) ^ (1/number-of-years) – 1* 100
= (((50/31) ^ (1/5)) – 1) * 100
This means the investment has grown 10.03% each year for a tenure of 5 years.
The SIP return will remain the same in terms of months as well.
CAGR = (((50/31) ^ (12/60)) – 1) * 100
CAGR = 10.03%
Hence the investment of INR 5,00,000 will grow to INR 8,06,353 in 5 years. This is a scenario of the investment giving above-average returns. If the NAV after five years is INR 44 and INR 40, the expected return would be approximately 12% and 10%, which is average and below-average, respectively.
One should not forget that mutual fund investments are subject to market risks. Hence, one should be mindful of the risks and understand the SBI SIP calculator is just an estimate of the potential returns and doesn’t guarantee them.
|NAV at the time of withdrawal||Expected Return||Maturity Amount||Growth Scenario|
|50||14%||INR 9,62,707||Above Average|
|40||10%||INR 8,05,255||Below Average|
How to use SBI Systematic Investment Calculator?
Every individual is curious to know the returns from their investment. This also helps the investor know that their investment is going in the right direction. Also, one can check that their investments align quickly with the financial goals for a particular duration.
Scripbox’s SBI SIP calculator helps in estimating potential returns from SIP investments for a particular investment period. The SBI SIP calculator is available online on Scipbox’s website, and one can use it for free. Scripbox’s SBI SIP calculator provides two approaches to estimating the wealth and maturity amount, namely ‘Investment Amount’ and ‘Target Amount’.
Investment Amount Approach
The investment amount approach uses the monthly amount that one can invest in a SIP. Thus, investors who know how much they want to contribute monthly will benefit from the investment amount approach. This helps in estimating potential SBI SIP returns. To determine the SBI SIP maturity amount and wealth gained for specific tenure, one has to follow the below steps:
- Firstly, decide the monthly investment amount (SIP amount)
- Next, enter the expected growth rate
- Enter the investment duration in years
- Finally, enter the step up percentage. Step Up means a yearly increment in the investment amount that is usually aligned with the growth of the investor’s income. In other words, investors can invest an additional SIP amount every year with a set percentage. Generally, the step-up percentage should be equal to the individual’s annual compensation hike.
The SBI SIP calculator will automatically estimate the potential gains at the end of the investment duration. Thus, this simplifies the calculation. Also, one can view the calculation of SBI SIP Maturity Amount either in a chart or table form. The investment graph is simple to understand as it provides a visualization of the SBI SIP maturity amount and the wealth gained during the investment tenure. On the other hand, in the tablet format, one can quickly identify the SBI SIP Step-Up value for every year (indicated with a blue arrow).
Additionally, the Scripbox SBI SIP calculator estimates the maturity amount based on three growth scenarios. They are above-average returns, average returns and below-average returns.
Target Amount Approach
Through the target amount approach, investors can estimate the monthly investment (SIP) amount required to meet their financial goals. Thus, the SBI SIP calculator helps in determining the monthly value. However, one must know how much money (target amount) they want in return at the end of the investment period. Therefore, one can calculate the monthly investment SIP amount by following the below steps:
- Firstly, enter the expected target amount
- Now, enter the expected growth rate
- Next, enter the investment duration in years
- Finally, set the step up percentage. Step Up means a yearly increment in the investment amount that is usually aligned with the growth of the investor’s income. In other words, investors can invest an additional SIP amount every year with a set percentage. Generally, the step-up percentage should be equal to the individual’s annual compensation hike.
The SBI SIP calculator will automatically estimate the SIP target amount. The calculation of the SIP target amount table shows the details of their SBI investments. Such as the number of years, investment amount, interest earned and maturity amount. Also, in the tablet format, one can easily identify the SBI SIP Step-Up value for each year (indicated with a blue arrow).
Furthermore, one should not forget that mutual fund investments are subject to market risks. Hence, one should be mindful of the risks and understand the SBI SIP calculator is just an estimate of the potential returns and doesn’t guarantee them.
What are the Benefits of the SBI SIP Calculator?
Research and analysis are important before making an investment decision. Also, one must understand the potential returns before investing. This helps to analyze if it is a profitable investment opportunity or not. Furthermore, the financial objective of the investor and the investment objective of the asset are aligned for the investors. Thus, this enables investors to select the right asset that will help them realize their goals faster.
The following are the benefits of the SBI SIP calculator:
Estimate maturity amount
The SBI SIP calculator helps investors to estimate their potential returns at the end of the investment duration. Hence, they can estimate the total value that they will receive at the end of the tenure. Also, the SBI SIP calculator helps in assessing the monthly investment amount if the investor knows how much maturity amount they want to earn at the end of their investment tenure.
Easy to use
Scipbox’s SBI SIP calculator is relatively easy to use and quick to navigate. One has to simply enter the details such as investment amount or maturity amount, expected return, investment tenure and step up percentage to estimate their returns or monthly investment amount. Also, the SBI SIP calculator saves investor’s time from doing complex calculations. The SBI SIP calculator estimates the maturity amount and the monthly investment amount within seconds.
Graphical and Tabular Representation
The SBI SIP calculator shows the return estimates in both graphical and tabulated forms. Through these representations, one can easily interpret the returns, investment amounts and make informed investment decisions.
Maturity amount based on growth scenarios
The SBI SIP calculator estimated the returns based on three growth scenarios. The three growth scenarios are based on above average, average returns and below-average returns. Therefore, investors can select the scenario based on their investment requirements before they start investing.
The Scripbox SBI SIP calculator provides an opportunity for the investor to step-up their investments annually. Stepping up SIPs allows individuals to achieve their financial goals faster. Also, the step-up details can be found in the table format of the SBI SIP maturity amount estimation.
Investors can compare multiple return scenarios using the free online SBI SIP calculator and make the right investment decisions that will help them earn significant returns.
Frequently Asked Questions
Which SIP is best in SBI?
SBI is India’s second oldest mutual fund house following Unit Trust of India (UTI). SBIMF became India’s largest asset management firm in January 2020, with a total of INR 3.82 lakh crore in assets under management.
As SBI offers multiple schemes with different investment objectives, the best funds vary from category to category. Furthermore, shortlisting the best schemes requires an in-depth analysis and comparisons.
At Scripbox, its proprietary algorithm shortlists the funds based on various parameters. Scripbox algorithm recommends 2 to 4 funds for investment across asset classes such as small-cap, mid-cap, large-cap, diversified, liquid etc. When you invest in an objective, the algorithm suggests the appropriate asset class and funds.
One can view all the Scripbox recommended best mutual funds and the Scripbox recommended SBI mutual funds.
Why should you invest in SIP?
Systematic Investment Plans (SIPs) allow investors to regularly invest a fixed amount of money in mutual funds. SIPs have the potential to create long-term wealth through small and regular investments. SIP investing is simple and convenient. The entire process is automated, and the amount gets deducted from your bank account for purchasing the units. Through SIP investments, an individual gets the opportunity to invest across market cycles. One doesn’t have to worry about timing the market. Above all, SIP inculcates financial discipline among individuals. One can save regularly to attain all their financial goals.
How can open a SIP in SBI?
One can invest in SBI SIP through Scripbox. Firstly, one has to create an account on Scripbox and log in with their credentials. Then, select any SBI mutual fund and click on invest. Now, click on the ‘Monthly SIP option’ and provide all necessary details like SIP investment amount, tenure and start date. Lastly, click on ‘Start SIP’. Your SIP Bank SIP investment will commence from the date provided by you.
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