SIP: A Pathway to Passive Income

Introduction to SIP

Every human is heading towards passive income. Passive incomes are smart income which can be earned through investing, renting, blogging and other works with less effort. Mutual funds are one among them. Mutual Funds are a portfolio of various stocks, bonds and other securities where a group of investors invest into it. Mutual Funds investment involves two types of investment Lump Sum amount and SIP. SIP is a monthly investment into mutual funds to gain huge returns at the time of maturity period. It works just as a bank account where an account holder deposits money every month as savings. Here, it is deposited into the market for further returns whereas no returns are expected in the savings bank account.
SIP (Systematic Investment Plan): Many investors are new to mutual funds and other investing sector calculatorsip.org helps to calculate the actual returns on different amounts of investment at different maturity periods. https://calculatorsip.org/ is a
SIP Calculator tool where an investor can use to get estimate returns on the total investment with just a few simple inputs.

What is an SIP Calculator?

SIP Calculator is a Systematic Investment Planning tool which helps an individual to plan their investments by providing approximate returns by giving basic inputs of investment. SIP Calculator gives a detailed return value on every investment amount at a different maturity period.

Types of SIP

• Equity SIP: Investing in any equity or company stock. Which has high potential returns which also includes market volatility.

• A higher risk is involved in this type of investment
• As it is a long-term investment horizon, returns are expected to be late.

• Debt SIP: Investing in fixed rates of income such as money market instruments, government securities, corporate bonds. Investors can choose Debt SIP for stable income and lower volatility.

• A regular income at low risk
• -Capital preservation
• Hybrid SIP: Investing in both equity and debt instruments. Equities such as bonds and debt instruments such as government securities, and money market instruments.

• Moderate risk exposure
• Income at regular intervals.

• Sectoral SIP: Investing in specific growing sectors such as banking, technology, healthcare,

• A high-risk appetite
• Specific sectoral insights
• long-term investment horizon

How to Calculate SIP

The calculator calculatorsip. uses a mathematical formula that generates an estimated return value after giving inputs such monthly investment amount, expected rate of return and maturity period.

The SIP Calculator uses this formula
A = Q × ({[1 + i]n – 1} / i) × (1 + i)
In this formula,

A = Actual amount received on the maturity date.
Q = Monthly investing amount
n = Number of payments
i = Periodic rate of interest

For Example:

If you are investing ₹ 2,000 per month for 2 years at a periodic rate of interest of 12%
The rate of return per month would be 12%/2 =0.06
Hence, in six months, you will receive approximately ₹6,486.