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SIP Topup
Calculator
Calculator
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Total SIP amount without Step-up
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Total SIP amount with Step-up
Growth value with Step-up
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Disclaimer: The calculator alone is not sufficient and shouldn't be used for the development or implementation of an investment strategy. This tool is created to explain basic financial / investment related concepts to investors. The tool is created for helping the investor take an informed investment decision and is not an investment process in itself. Bajaj Finserv AMC has tied up with AdvisorKhoj for integrating the calculator to the website. Mutual Fund does not provide guaranteed returns. Also, there is no assurance about the accuracy of the calculator. Past performance may or may not be sustained in future, and the same may not provide a basis for comparison with other investments. Investors are advised to seek professional advice from financial, tax and legal advisor before investing in mutual funds.
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What is an SIP step-up calculator?
An SIP step-up calculator is a dynamic tool that allows investors to explore the potential impact of increasing their SIP investments over time. By considering factors like additional contributions and compounding returns, a SIP step-up calculator allows you to explore the impact of systematically increasing your SIP investments over time. A top-up SIP mutual fund calculator provides a nuanced understanding of how small adjustments can lead to substantial gains.
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How does the top-up SIP calculator work?
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Here's how it works:
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First, input your initial investment amount and SIP details like tenure and expected return rate.
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Then, specify how much and how often you want to increase your SIP.
The SIP step-up calculator then computes the potential returns based on your inputs. It demonstrates how regular top-ups can increase your savings and accelerate wealth accumulation.
Let’s understand this with the help of an example.
Imagine you begin an SIP to save for a house. You opt for a monthly investment of Rs. 20,000 over 10 years in a mutual fund scheme with an expected annual return of 11% p.a. This strategy could help you accumulate approximately Rs. 43 lakhs with an investment of about Rs. 24 lakhs.
Alternatively, by increasing your monthly investment by 10% each year, you could potentially build a corpus of around Rs. 64 lakhs with an investment totaling approximately Rs. 38 lakhs over the same period.
Step Up SIP Calculator formula with example
The formula for calculating the future value of a Step Up SIP can be expressed as follows:
Future Value (FV) = P × [(1 + r)^n - 1] / r × (1 + r) + S × [(1 + r)^n - 1] / r × [(1 + r) - 1]
Where:
P = Initial monthly SIP amount
S = Annual step-up amount
r = Expected monthly rate of return (annual rate / 12)
n = Total number of months of investment (years × 12)
Example:
Let’s say you start with an initial SIP of Rs. 5,000, increase it by Rs. 500 each year, expect an annual return of 12%, and plan to invest for 10 years.
Initial SIP (P) = Rs. 5,000
Annual Step-Up (S) = Rs. 500
Expected Annual Return (r) = 12% → Monthly rate = 1% (0.12/12)
Total Investment Duration (n) = 10 years → 120 months
Using the formula, you can input these values to calculate the future value of your investments, helping you understand the potential growth of your SIP over time.
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How to use Bajaj Finserv AMC SIP step-up calculator?
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Using our Step-Up SIP Calculator is simple:
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Step 1: Enter your current SIP details: Monthly SIP amount and duration.
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Step 2: Specify the additional amount you want to increase annually (top-up amount).
The calculator will generate projections, illustrating how these incremental contributions can amplify your returns over the investment horizon.
Benefits of SIP step-up
Systematic Investment Plans (SIPs) are known for their ability to encourage disciplined and steady investment habits among individuals. By enabling regular contributions, SIPs promote consistency and commitment towards long-term financial goals. Moreover, they leverage the concept of rupee cost averaging, allowing investors to benefit from market fluctuations over time. Coupled with the power of compounding, SIPs offer a suitable strategy for building wealth systematically. Here’s how SIP top-ups further enhance these advantages.
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Disciplined investing: SIP instils financial discipline, encouraging regular contributions.
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Rupee cost averaging: Invest consistently regardless of market fluctuations, leveraging the concept of rupee cost averaging.
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Compounding benefits: Make optimal use of the power of compounding to potentially grow your wealth over time.
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Advantages of an SIP Step-Up calculator
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SIP step-up calculator helps investors visualize the impact of gradually increasing their investment contributions over time. Mentioned below are some of the advantages offered by Bajaj Finserv AMC SIP top-up calculator:
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Strategic planning: Plan your future investments strategically, considering potential top-ups.
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Visualize growth: Get a clear visual representation of how incremental contributions can impact your portfolio.
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Goal alignment: Align your investment strategy with specific financial goals, adapting as your needs evolve.
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Future financial planning: It helps you plan for increasing expenses over time, such as education or retirement, by factoring in inflation and lifestyle changes.
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Goal-oriented investment: You can set specific financial goals and see how adjusting your SIP amount annually can help you achieve them.
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Visualize growth: The calculator provides a clear picture of potential investment growth over time, making it easier to understand the benefits of increasing contributions.
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Customizable scenarios: You can adjust parameters like initial investment, step-up percentage, and investment horizon, allowing for personalized projections.
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Inflation adjustment: It allows you to account for inflation in your savings strategy, ensuring your future purchasing power is protected.
- Simple calculation: It simplifies complex calculations, making it accessible for investors at any level of experience.
Different Types of SIPs
While traditional Systematic Investment Plans (SIPs) are the most widely recognized, various asset management companies offer innovative alternatives to enhance flexibility in SIP investing. Here are some notable types:
Fixed SIP: This option allows you to set an end date for your SIP. If you don’t specify a date, your SIP will continue until 2099. Perpetual SIP: With this type, you can invest in mutual funds indefinitely without a predetermined end date. You also have the freedom to halt withdrawals whenever you choose.
Trigger SIP: Instead of committing to fixed amounts at regular intervals, you can set up SIPs that activate based on specific market conditions. For instance, a trigger SIP might automatically invest when the Net Asset Value (NAV) drops below a certain threshold, allowing you to better time your investments.
Top-up SIP: This plan enables you to increase your SIP contributions periodically as your income rises. For example, you might opt to boost your investment by 10% each year.
Flexible SIP: This variant gives you the ability to adjust the amount of each instalment or skip contributions entirely, depending on your financial situation. Just notify the fund house in advance according to the mutual fund’s terms.
These diverse SIP options empower investors to customize their investment strategies to fit their unique financial goals and circumstances!
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Frequently Asked Questions
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Yes, you can. You can increase your existing SIP calculator contributions gradually over time to accelerate wealth growth according to your financial goals.
The average rate of return on SIP investments depends on the mutual fund scheme you've chosen to invest.
Yes, the Bajaj Finserv AMC SIP step-up calculator can be used for free. It allows you to simulate different investment scenarios without any cost.
Yes, most SIPs offer flexibility, allowing investors to modify the investment amount or tenure based on their financial circumstances and evolving goals.
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