SIP or Systematic Investment Plans are financial instruments that allow investors to invest a fixed sum regularly in Mutual Funds of their choice. With these investment plans, a fixed amount is deducted from the investor’s savings account each month and is directed towards their selected Mutual Funds. An individual can opt for weekly, quarterly or monthly investment plans for SIPs.
Most investors have a common misconception that SIPs are a category of Mutual Fund. SIPs are, however, one of the methods of investing in Mutual Funds, while the other method is lump-sum investments.
For instance, investors can choose to invest in Equity Linked Savings Scheme (ELSS) Mutual Funds through SIPs. Investing in these Mutual Funds offers investors tax benefits of up to Rs. 1.5 Lakh on their principal amount under Section 80C of the Income Tax Act.
HDFC is one such financial institution that offers individuals an option to invest in Mutual Funds through SIPs. Furthermore, this institution also offers investors the benefits of HDFC SIP calculator, which can help them, calculate the returns they can avail by investing their capital in these funds.
SIPs make for a more preferred choice of investing in Mutual Funds for many investors because they allow them to invest small quantum of capital over a period of time rather than make a lump-sum payment at one go. It is also a much more lucrative way of investing, allowing individuals to avail a much more disciplined approach towards their investments.
The HDFC SIP calculator, additionally, makes for a beneficial tool in the individual’s arsenal and enables them to gauge the future value of the amount they have invested. Following are a few benefits that investors that avail by using an online SIP calculator –
An HDFC mutual fund SIP calculator uses the following formula to calculate the returns from an individual’s SIP investment –
M = P × [{(1 + i) ^n – 1} / i] × (1 + i)
Where M is the amount received on the investment’s maturity, P is the amount invested periodically, n is the number of payments already made, and i is the rate of interest applicable.
For instance, an individual chooses to invest Rs. 2000 each month for 12 months at a rate of interest of 14%.
In this case, the amount investors will receive on maturity will be given by –
M = 2000 X [{(1+14)^12 – 1 }/ 14] x (1 + 14)
Therefore, M = Rs. 25,900 (approx.)
However, investors should remember that the applicable rate of interest on SIPs varies according to market conditions. Therefore, they should be cautious while entering the data in the HDFC SIP calculator.
Following are the returns individuals can avail by investing in the best HDFC SIP Mutual Funds –
| Fund Name | 1-year return | 3-year return |
| HDFC Hybrid- Equity Fund | 1.58% | 8.61% |
| HDFC Mid-Cap Opportunities Fund | -10.49% | 4.9% |
| HDFC Top 100 Fund | -0.38% | 9.63% |
| HDFC Equity Fund | -5.95% | 8.53% |
Investors can avail the following advantages by using the Groww’s HDFC SIP Mutual Fund calculator –
These calculators are, thus, extremely useful tools that can help investors make comprehensive financial decisions regarding their investments and follow them through to maximise the benefits availed.
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