Tax Calculator
Check how much tax you can save by investing in an ELSS Mutual Fund.
This is how much tax you pay
Tax on income after investing
Tax you Saved
I'm ready to invest
Disclaimer:
This tax calculator is meant for Resident individuals aged below 60 years only.
Please note that this calculator is for illustration purpose only and investors should consult their tax advisor for tax related advice.
Inflation Calculator
Calculate the impact of inflation on your money. Find out how much you will need in the future to meet your current expenses whilst keeping up with inflation.
₹
Future Cost:
Disclaimer:
Past performance may or may not be sustained in future and is not a guarantee of any future returns.
Please note that these calculators are for illustrations only and do not represent actual returns.
Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Inflation is linked to rising prices and decreased purchase power of the individual. This makes Inflation a crucial factor to note. Every individual needs to know the effect of Inflation on his/her purchase power - making it easier to manage finances in the future.
It is a tedious process to calculate how much money you will need in the future at the growing rate of Inflation. But you can use the Inflation Calculator to do so.
What is the Inflation Calculator?
The inflation calculator is an online tool that can be used to calculate the effect of Inflation on your purchasing power. It will primarily indicate the worth of a quantity of money after a certain period of time.
What is Inflation, and How Does it Affect Your Savings?
Inflation is the general increase in the price of goods and services in an economy over a period of time. It is mainly thought of as the decrease in purchase power over time.
Inflation has the tendency to erode the value of your savings, especially your fixed payout investments since they can't keep pace with the growing prices. The main ways through which Inflation could affect your savings are:
Interest Rates: Inflation will affect savings’ interest rates. This is because the interest rates on your savings will be comparatively lower than the inflation rate.
Degradation of Value: The amount deposited in savings accounts will grow at the prevailing rate - but the value would have degraded since inflation results in a price rise.
Cash: Inflation is most detrimental to cash - since cash does not grow with time. If , most of your fixed savings is primarily in cash, it can take a significant down turn.
Provided that Inflation can affect your savings, purchase power, investments, and several other financial attributes in these manners, an Inflation calculator can come to great use.
How to Overcome Inflation?
Individuals can overcome Inflation by taking some preventive measures.
In order to overcome Inflation, an individual can take the steps mentioned below:
1. Hedge Against Inflation: Inflation hedges are investments that protect individuals from the decreasing purchase power of their money. These investments are expected to maintain or even increase in value during inflation cycles. Some examples of these investments are Mutual Funds, Gold, Stocks, ETFs, and more.
2. Diversify Your Income: To manage Inflation, you will have to diversify your assets amongst cash, bonds, equities, and alternative investments. This reduces the effect of Inflation on your finances.
3. Mindful Financial Management for the Future: Steps such as using an Inflation calculator, planning ahead of time, taking cautious financial measures, diversifying your portfolio, and more can lead to better safeguarding against Inflation in the future.
How is Inflation Calculated?
Inflation is calculated through the CPI (Consumer Price Index.) CPI is the measure taken by examining the average prices from a hypothetical basket of goods and services bought by consumers. You can calculate CPI through:
CPI = (Cost of Fixed Basket of Goods & Services in the Current Year/The Cost of Fixed Basket of Goods & Services in Base Year) *100
After the calculation of CPI, Inflation is calculated with the formula:
Inflation = ((CPI x+1 – CPIx)/ CPIx))*100
The Inflation calculator works on this formula and gives you instant results.
How to Calculate Future Value?
Future value calculator
Future value (FV) is the value of an asset on a certain date in the future based on a particular growth rate. You can calculate FV through the formula:
FV = PV*(1+i)^n
PV: = Present value
i: = Interest rate
n: = Number of time periods
We can understand this with an example.
Mr. X owns assets and wants to know the value of it on a future date. The components of measurement are:
Present Value (PV): 2,50,000
Growth Rate (i): 12%
Time Period (n): 5 years
FV = 2,50,000*(1+12%)^5
Future Value = 4,40,585
Benefits of Inflation Calculator
The inflation calculator comes in useful in the below-mentioned ways:
1. Ease of Use: The calculator is user-friendly and can be used by anyone at a glance.
2. Eliminates Human Error: The calculator will give you the most accurate results (since it works with a pre-programmed algorithm), eliminating circumstances of human error.
3. Establishes Better Financial Planning: You can plan ahead with the use of the inflation calculator. You can strategize investments, spending, and savings based on economic movements.
4. It Saves Time: Manual calculations are time-consuming and tedious. The results from this calculator are given almost instantly.
5. Helps to Estimate Future Value: Through the right calculations of inflation rates, you can estimate the future value of your assets. In order to know the worth of your money or assets on a future date, you will need the accurate inflation/growth rate.
FAQs
Q1. Why do I need to use the inflation calculator?
Using an inflation calculator enables you to understand the decrease in your purchase power in the future - it helps you plan your finances based on this estimation.
Q2. What details do I need to enter in the calculator?
You will have to provide the value of the current expenses, the annual inflation rate, and the time period in years.
Q3. Is the inflation calculator charged?
The inflation calculator can be used free of cost.
Q4. What is deflation?
The inflation calculator can be used free of cost.
.jpg?itok=FEyhEBXU)
SIP Calculator
Find the future value of your monthly SIP investment.
₹
Your investment:
Future value of your investment:
Disclaimer:
Past performance may or may not be sustained in future and is not a guarantee of any future returns.
Please note that these calculators are for illustrations only and do not represent actual returns.
Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return.
SIPs (systematic investment plans) are an easy method for investors to begin their mutual fund investment journey without having a lump sum capital. They allow an investor to invest small amounts systematically into a mutual fund over a long period of time.
Here, there is an online calculator that investors can use to understand the estimated returns of an SIP method of investment.
What Is an SIP Calculator?
A Systematic Investment Plan (SIP) calculator is an online tool utilised to assist a potential investor to predict the possible growth of their investments. It simplifies the calculation of future returns, and with it, investors can plan their investments with specific numerical forecasts rather than relying on market projections.
It can be complex to do manual calculations, especially for new investors trying to invest in mutual funds. Estimating the future value of an SIP based mutual fund investment is time-consuming, and could result in errors.
By automating complex mathematical calculations, the SIP calculator assists both new and seasoned investors in making smart choices.
The Use of an SIP Calculator in Financial Planning
Investing is a challenging task to anticipate how modest, consistent inputs can add up over a long period of time. An SIP calculator makes the process easier to understand by:
Generating Instant Estimates: It converts monthly investments into a projected future corpus.
Avoiding Manually Computed Calculations: Saves time by removing the need for complex math or spreadsheet work.
Facilitating Scenario Comparison: Allow Investors to try various investment amount, expected returns, or time periods to see how each change impacts outcomes.
Supporting Goal Setting: Whether retirement planning, saving for education, or purchasing a home, the calculator assists in connecting investments with goals.
How Does SIP Calculator Work?
Fundamentally, an SIP calculator uses a specific mathematical formula to calculate the value of investments in the future. The formula applied:
FV = P * (((1 + i)^n – 1) / i) * (1 + i)
Where:
- FV stands for the future value at the investment horizon.
- P is the amount of SIP on a monthly basis.
- i is the rate of return on a periodic basis (monthly).
- n is the number of instalments or contributions.
Understanding the SIP Calculator Formula
Compound Growth: The calculator presumes each monthly payment returns a compounded amount over time.
Rate Conversion: Because most returns are expressed as annual returns, the yearly rate is translated to a monthly rate (i.e., by dividing the yearly rate by 12).
Exponential Effect: The formula applies the power of compounding – regular small payments invested can yield big returns over a long term.
Example Calculation
Take the case of an investor who invests ₹5,000 per month with a projected annual return of 12% for 7 years. From the SIP calculator:
Total Investment: About ₹4.20 lakh is invested over 7 years.
Future Value: The corpus may become around ₹6.60 lakh, showing how regular investing along with compounding interest can result in remarkable returns in the long run.
Types of SIPs: Choosing the Right One
1. General SIP
Definition: A fixed amount is invested at specified intervals (usually monthly), promoting consistent investment behavior.
Suitable for: Investors seeking disciplined, convenient investments with few changes.
Advantages:● Encourages systematic savings
● Helps rupee cost averaging
● Reduces the impact of market fluctuations
2. Step-up SIP
Definition: A Step-up SIP, also known as a top-up SIP, allows investors to automatically increase their SIP contribution at predefined intervals – usually annually. This helps align growing investments with rising income levels and tackle the long-term impact of inflation effectively.
Suitable for: Ideal for salaried professionals and others who expect their income to grow steadily and want their investment commitments to evolve accordingly.
Advantages:● Fights Inflation
● Maximises investment during high-earning years
● Helps accumulate wealth along with increasing income
A Step-up SIP is highly effective for investors aiming to build a future-ready portfolio with minimal intervention, as it not only scales long-term investments strategically but also counters inflation by increasing contributions with income growth.
3. Flexible SIP
Definition: A flexible SIP has varying amount of contributions each month according to the market or personal income preferences.
Suitable for: Investors whose income fluctuates or who might want to invest more in optimistic market conditions.
Advantages:
● Flexible to finance changes
● Offers the ability to invest more in downtrends in the market
4. Perpetual SIP
Definition: No fixed time; the investor can continue the SIP indefinitely.
Suitable for: Long-term investors looking to accumulate wealth over an extended period of time.
Advantages:
● No pressure to stop investing
● Apt for people with long-term financial goals
5. Trigger SIP
Definition: Investments are made only when certain market levels or net asset value (NAV) levels are achieved.
Suitable for: Investors who want to maximise entry points in uncertain markets.
Advantages:
● More potential returns by avoiding overpriced entry points
● Specifically designed to accommodate market timing without constant monitoring
6. Multi SIP
Definition: Facilitating investment in multiple mutual fund schemes under one SIP plan.
Suitable for: Diversified investors seeking to diversify risk across a portfolio of funds.
Advantages:● Simplifies management of multiple investments
● Enhances portfolio diversification
Various SIPs are appropriate for various risk profiles and financial objectives. The choice of the appropriate one depends on the investment horizon, income stability, and market expectations of an individual.
SIP vs. Lump Sum Investment: A Comparative Analysis
On the investment front, one of the earliest decisions investors must make is whether to invest in a lump sum or make instalments every month through SIP. Both options have their advantages, but the better choice ultimately depends on market conditions and individual financial situations.
| Parameter | SIP | Lump Sum |
|---|---|---|
| Investment Type | Consists of regular, typically monthly investment, minimising market timing risk. | One-time, single investment which could gain from market falls if the timing is appropriate. |
| Market Timing Risk | Lower risk owing to rupee cost averaging, where the investments are made over a period of time. | Higher risk since the entire sum is exposed to the market at a given point in time. |
| Risk Diversification | Provides greater diversification over a period of time since investments are made across different market cycles. | Limited diversification if invested at the wrong time. |
| Suitability | Best for frequent investors seeking long-term wealth creation. | Best for individuals with excess funds who are ready to assume a greater level of market risk for possible quick returns. |
Common Mistakes to Avoid in SIP Investments
Although SIPs offer numerous benefits, investors should be mindful of common mistakes that may impact their long-term wealth creation.
Halting SIPs During Market Declines:
Some investors choose to pause their SIP investments during market fluctuations due to fear of short-term losses.
Avoid This Mistake By:
Staying invested even during market downturns. These phases are usually temporary, stopping SIPs during these periods can lead to missed opportunities when the market recovers. And continuing SIPs during this phase helps benefit from lower NAVs, aiding long-term growth.
Forgetting to Raise Contribution Over Time:
Failure to raise the amount invested as income increases may limit growth.
Avoid This Mistake By:
Using a Step-up SIP, which automatically raises your investment in line with income growth – helping you stay ahead of inflation.
Investment Without Specific Target:
Investing randomly or without a clear objective can lead to misaligned financial outcomes.
Avoid This Mistake By:
Setting defined financial goals — like retirement, child’s education, or buying a house – and aligning your SIP strategy accordingly.
Neglecting Fund Performance:
Some investors, at times, remain invested in a fund without evaluating its performance in the long run.
Avoid This Mistake By:
Reviewing fund performance periodically and rebalancing your portfolio if needed if needed to stay aligned with your financial objectives.
SIP Return Fluctuations: Understanding Them
Although SIP calculators provide beneficial estimates, remember that mutual fund returns are prone to market fluctuations. Here's the reason why SIP returns can fluctuate:
Factors Affecting SIP Returns
- Market Volatility: Short-term market fluctuations can affect returns, though the long-term trend is usually in the upward direction.
- Economic Conditions: Inflation, interest rates, and overall economic growth influence the performance of mutual funds.
- Fund Management and Performance: The competence and style of the fund manager are critical in deciding the success of the fund.
- Practical Insights
- Long-Term Trends Matter: Though monthly returns are volatile, long-term investments tend to smooth out volatility.
- Regular Monitoring Is Paramount: Investors should review their portfolios periodically and be prepared to make adjustments in light of major economic developments.
It puts the dynamics into perspective, allows for realistic expectations, and reminds us of the need for a long-term investment horizon.
Investment Goal Setting with SIPs
1. Retirement Planning
Goal: Build a strong financial foundation to support your lifestyle after retirement.
Method: Invest regularly over the years to build a reliable savings fund for the future through the power of compounding.
Use a mix of equity and debt funds to strike the right balance between growth and stability.
2. Child's Education
Objective: Save sufficient money for future education expenses.
Approach: Begin early to gain through compounding fully.
Align the investment horizon with your child's college joining age.
3. Wealth Building
Objective: Achieve long-term financial independence through systematic investing.
Approach: Establish incremental target milestones.
Systematically review and rebalance your portfolio in line with market requirements.
4. Home Purchase
Goal: Finance a future house purchase down payment corpus.
Method: Start from a logical initial rate of monthly investment.
Make use of the SIP calculator to vary investments as your earnings increase.
With the alignment of SIP investments against certain goals, investors can achieve a personalised financial plan that saves money and accumulates wealth in the long run.
How to Use a Systematic Investment Plan Calculator
Utilising an SIP calculator is easy and very effective for charting your investment path. Simply follow these steps to begin:
Enter Your Monthly SIP Amount:
Enter the value of the fixed money you desire to invest each month.
Enter the Expected Annual Return:
Based on historical trends, equity funds have the potential to deliver higher returns over the long term.
You can modify the expected rate according to your investment goals, risk profile, and the type of fund selected.
Choose the Investment Tenure:
State for how long you plan to continue investing. It could be for some years or decades. View Instant Results
The calculator will display future corpus according to the parameters you provided.
Benefits of Using an SIP Calculator
A SIP calculator is not just a calculator that does simple arithmetic; it is a tool with several benefits that enhance investment discipline and financial planning.
- Instant and Precise Results: Provides quick estimates without any calculations, conserving time and effort.
- Better Investment Planning: Helps determine the right SIP amount to achieve specific financial goals.
- Scenario Analysis: Enables investors to compare different scenarios by altering parameters such as contribution amount, expected return, and tenure.
- Reduces Human Error: Automated calculations reduce errors that may occur in manual calculations.
- User-Friendly and Accessible: SIP calculators online are mostly free and can be accessed anytime, and they are a necessary tool for new as well as experienced investors.
FAQs
Q1. What is an SIP Calculator?
A SIP calculator is an online tool that estimates the future value of your investments in mutual funds based on investments made at periodic intervals. It uses a compound interest formula to estimate returns.
Q2. Should I rely solely on the SIP calculator while deciding on investments?
While a SIP calculator gives good approximations, it should be remembered that actual returns can vary with market fluctuations and general economic conditions. It should be used as a planning tool, not a guaranteed forecaster.
Q3. What are the key factors influencing SIP returns?
- The amount of money invested each month
- The expected rate of return
- The investment duration
- Market conditions and volatility
Q4. SIPs for all?
SIPs are particularly helpful to investors looking to invest with a systematic, long-term approach to generating wealth. They are most appropriate for those with a regular income, but even those who have spare money can invest lump sums at times when the market is low.
Q5. What are the tax benefits of SIP investment?
SIP investments in Equity-Linked Savings Schemes (ELSS) can be claimed under Section 80C. Moreover, long-term capital gains on equity funds are taxed at a relatively lower rate, encouraging consistent investments.
Q6. How often should I review my SIP investments?
Once a year at least, but more often if you observe sudden market changes.
Conclusion
A good investment plan is necessary to achieve financial goals.
A SIP calculator is a valuable tool that simplifies intricate calculations and allows investors to visualise the potential growth of their investments.
Whether you are planning for retirement, funding a large purchase, or simply wish to build wealth over time, an SIP calculator can significantly enhance your planning.
Goal SIP Calculator
Determine the monthly SIP investments you need to make to reach a particular goal.
₹
Your Total Investment:
Monthly SIP Amount:
Disclaimer:
Past performance may or may not be sustained in future and is not a guarantee of any future returns.
Please note that these calculators are for illustrations only and do not represent actual returns.
Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
The majority of investors target a certain amount of wealth within a time frame before the beginning of their investment journey. In terms of systematic investment plans for mutual funds - an investor can decide the SIP amount to invest each month and, the period to stay invested for.
For this SIP investment analysis - investors can seamlessly use the Goal Based SIP Calculator.
What is a Goal Based SIP Calculator?
The Goal-Based SIP Calculator is an easy-to-use online software or tool that assists you in getting an idea of the maturity value (wealth accumulation goal). This is a tool you can use even before you invest your money
This tool works through a pre-programmed algorithm that calculates the result with the data you provide, such as - targeted corpus, tenure, and return rate. However, the SIP calculator is a mere estimation of the future value of a fictitious investment based on the input you provide and cannot be guaranteed since mutual funds carry market risks. Therefore, it is also known as a Future value calculator.
How Does the Goal-Based SIP Calculator Work?
The SIP calculator is simple to use and gives you the SIP value by the data points you enter. You can use the Goal-Based SIP Calculator through the steps explained below:
Step 1: Enter the goal amount you want to reach through your SIP investment.
Step 2: Choose the duration of the investment.
Step 3: Input the expected rate of return (%) per annum.
You will see the display of your total investment and the monthly SIP amount you need to invest.
The determination of the monthly SIP amount and time frame of investment is crucial to reaching a particular goal, which this calculator can navigate you through.
Advantages of Using the Goal-Based SIP Calculator
The benefits of using the Goal-based SIP calculator are:
1. It is a Future Value Calculator: This Goal based SIP calculator offers you the futuristic values of an investment, stimulating you to invest more systematically.
2. It Can Save Time from Manual Calculations: Manual calculations on how much you need to invest in SIP methods every month to reach a certain maturity amount can be time-consuming. This calculator provides you with a quick resolution.
3. It Avoids Human Error: The generic mistakes that happen during manual calculations can be avoided with the use of the Goal-Based SIP Calculator.
4. It Helps to Determine and Strategize an Investment Plan: When you understand how much you have to invest each month to reach an estimated value, it assists you in strategizing and planning your investments accordingly.
FAQs
Q1. What is the Goal based SIP calculator?
The Goal based SIP calculator is an online tool that can be used by investors to understand how much they need to invest as SIPs for a targeted maturity amount.
Q2. How is the Goal based SIP calculator different from the SIP calculator?
The SIP calculator gives you the maturity amount of an investment, and the data you will have to input is - SIP amount, return rate, and investment tenure. Whereas the goal-based SIP calculator is when you enter the maturity amount you need, the return rate, and investment tenure, then the calculator will tell you the SIP value you need to invest every month.
Q3. How will the Goal based SIP calculator help me?
The calculator can provide you with instant results, helping you avoid the time consumed by manual calculations. Moreover, you get to estimate the futuristic outcome of an investment.
Q4. What makes the Goal-based SIP calculator a useful tool?
It can cater as an essential tool for financial planning, informed decision-making, estimating the investment amount, and targeting a corpus.
