SIP Return Calculator with Excel [VIDEO] - FinCalC Blog (2023)

Lots of people ask on mineYoutube Videoscomments how to calculate sip yield, which sip is best for 15 years, what is the average yield on sip or what is a good sip yield and is there a sip yield calculator in excel?

SIP or Systematic Investment Plan in mutual funds help us achieve our goals in a systematic and disciplined manner. One can use SIP Return Calculator in Excel which is the offline way to calculate SIP Returns. This article also provides information about your SIP returns for the next 5, 10, or 20 years, while simply providing your SIP amount and expected returns, all of which can be done using an Excel calculator!

SIP Return Calculator Video mit Excel

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What is SIP

SIP (Systematic Investment Plan) is a way to invest in stocks or mutual funds on a regular basis over a period of time. You can choose to invest every month or every week. The full form of SIP is a systematic investment plan.

SIP is the best way to invest in stocks or mutual funds compared to investing your entire body at once. Whereas with SIP you are disciplined enough and invest a fraction of your corpus every month or week. There are many advantages of investing via the SIP route compared to a capital investment.

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Benefits of SIP

• Allows you to invest only afraction of the amountinstead of whole corpus at once. You can choose that fraction of the amount as a SIP based on affordability
• Rupee Cost Average. They buy more units when the market falls because the NAV is lower (more on that below). This increases your returns when the market returns to normal
• you can havemultiple SIPsbased on your goals, whether they are short-term, medium-term or long-term goals
• SIPs are flexiblenowadays. You can pause a SIP for a few weeks or months, or stop the SIP if your goal is reached ahead of time
• You become disciplined in working towards goals with given timetables

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How returns are calculated in SIP

You must have heard about the NAV (Net Asset Value) of a stock or mutual fund.

If not, the NAV or Net Asset Value is the price of a unit of stock or mutual fund. That means it's the value per share or unit in stocks or mutual funds.

Example

Let's say the NAV of a mutual fund is Rs. 100.
That means the price for 1 unit of this mutual fund is Rs. 100

If you invest Rs. 100 in this mutual fund, you will receive 1 share of this mutual fund in your investment account.
If you invest Rs. 1000, you get 10 units.
If you invest Rs. 10,000, you get 100 units and so on.

This is how you accumulate stocks or mutual fund shares in your investment account.

20 years SIP yield calculator video

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Formula

Units = amount divided by NAV

Similarly, you invest in SIP each month and accrue units based on the NAV of stocks or mutual funds on that day.

Here are some screenshots of units accumulated over a period of time:

Yield = 10%
Total accumulated units = 10,448.82over a period of 20 years

Yield = 12%
Total accumulated units = 9172.761over a period of 20 years

Yield = 15%
Total Accumulated Units = 7689.156over a period of 20 years

As seen above, as the expected rate of return increases, the NAV increases and the total units you can accumulate decrease. Total units accumulation is inversely proportional to NAV.

SIP Return Calculator for the Next 10 Years Video

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How to Maximize SIP Returns

You can't time the market to take advantage of ups and downs.

In theory, you should buy low and sell high for maximum returns, but can you predict these ups and downs in the market? You can not.

If it were easy to time the market, people would be busy making money in markets instead of telling you how to make money online or how SIP works!

History has taught us that the dead (or inactive) accounts that do not panic buy or sell based on their emotions related to the ups and downs of the market have the advantage over active accounts.

People with active accounts try to be smart and time the market. But they lose in the long run.
Only 0.1% of people would be able to time the market just 0.1% times based on their luck.

• So, the best way to get the maximum profit is to continue using SIP for a longer period of time
• No panic buying or panic selling based on emotion
• Don't try to time the market
• Start investing and forget it
• Invest in low-cost mutual funds

How to choose from multiple mutual funds

Every mutual fund hasexpense ratioIn connection. These are the fees that AMC (Asset Management Company) charges for managing your funds.

You should choose the mutual fund that has a low expense ratio.
Low expense ratio means you pay low fees for your assets under management.

Speaking of low expense ratios, index funds are the type of mutual fund with low expense ratios, meaning low fees.

So the secret to maximizing your returns in mutual funds is to start SIP in low fee funds like index funds and start investing and forget about it until you hit 60 or more.

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DOWNLOAD THE EXCEL CALCULATOR FOR SIP RETURNS

Download the SIP Return Calculator in Excel from the link above.

Frequently Asked Questions (FAQ)

Q. What is the full form of SIP?

Ans. Systematic Investment Plan Complete SIP Form. Usually, SIP is a specific amount that you invest each month to achieve specific goals with a specific tenure (period).

Q. How does SIP work?

Ans. SIP is the specific amount you invest each month towards a specific goal with a specific time period. You invest an amount of say Rs. 5000 each month for 5 years and with an expected return of 10% per year. In this case your expected investment value after 5 years would be Rs. 3,90,411 according to the SIP returns Excel calculator provided above. This will make you a profit of Rs. 90,411 in 5 years and also help you to achieve your goal.

Q. What is an investment?

Ans. Lump sum investment means that you invest the entire amount at once. Let's say you have invested Rs. 1,20,000 for a year. In SIP, divide this Rs. 1,20,000 for 12 months (1 year) and invest Rs. 10,000 in mutual fund every year. On the other hand, with lump sum investment, invest the whole amount of Rs. 1,20,000 in the first month at once. This is called an investment.

Q. What is better than SIP or lump sum investment?

Ans. Combination of SIP and flat rate is better. You can continue with your SIP on normal days and invest a lump sum if available when the market slows down. This way you get more units when the market goes down and make more profits during a market crash.

Frequently Asked Questions (FAQ)

Q. What is the full form of SIP?

Ans. Systematic Investment Plan Complete SIP Form. Usually, SIP is a specific amount that you invest each month to achieve specific goals with a specific tenure (period).

Q. How does SIP work?

Ans. SIP is the specific amount you invest each month towards a specific goal with a specific time period. You invest an amount of say Rs. 5000 each month for 5 years and with an expected return of 10% per year. In this case your expected investment value after 5 years would be Rs. 3,90,411 according to the SIP returns Excel calculator provided above. This will make you a profit of Rs. 90,411 in 5 years and also help you to achieve your goal.

Q. What is an investment?

Ans. Lump sum investment means that you invest the entire amount at once. Let's say you have invested Rs. 1,20,000 for a year. In SIP, divide this Rs. 1,20,000 for 12 months (1 year) and invest Rs. 10,000 in mutual fund every year. On the other hand, with lump sum investment, invest the whole amount of Rs. 1,20,000 in the first month at once. This is called an investment.

Q. What is better than SIP or lump sum investment?

Ans. Combination of SIP and flat rate is better. You can continue with your SIP on normal days and invest a lump sum if available when the market slows down. This way you get more units when the market goes down and make more profits during a market crash.

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