Why SIPs Are Ideal for First-Time Investors

Systematic Investment Plans (SIPs) have emerged as a favorable route for first-time investors venturing into the Indian financial market. The ability to calculate returns for SIP investment is one of the critical factors that make SIPs attractive, providing clarity on potential earnings and enabling investors to make informed decisions. To calculate returns for SIP investment , investors need to consider the SIP amount, the duration of investment, and the expected rate of return. Let's break down a scenario. Suppose an individual invests ₹5,000 monthly in a mutual fund for a duration of five years, with an average annual return rate of 12%. Using the SIP return calculator will show the following results: SIP Monthly Investment: ₹5,000 Investment Duration: 5 years Total Investment: ₹5,000 60 months = ₹3,00,000 Expected Annual Return: 12% The compounded value of this regular investment can be calculated using the formula: \[ A = P \times \left( \frac{(1 + r)^n - 1}{r} ...