ICICI SIP Calculator

The growing popularity of systematic investment plan (SIP) investments in all manners of ICICI Prudential mutual funds has led to the necessity for investors to gauge the value of their proposed or actual investments over time. In order to aid with this effort and provide adequate information to investors so that they can grow their wealth, ICICI Prudential Mutual Fund AMC provides a few different SIP calculator variants. These are – the ICICI SIP Future Value calculator, the ICICI SIP Investment Planner Calculator and the ICICI SIP Past Value Calculator. Each of these calculators has a special purpose and can provide prospective as well as existing investors with various data according to the unique requirements of each investor group.

The systematic investment plan offered by ICICI Prudential Mutual Fund AMC is basically the same as similar systematic schemes offered by other asset management companies in India. From the investor’s perspective, a specific ICICI mutual fund in any of the key categories of equity, debt or balanced fund needs to be selected. Then an SIP amount needs to be determined along with the duration i.e. tenure for which the SIP would be maintained. Both the SIP installment amount and tenure may be subject to some minimum level criteria which may vary from one fund to another. On a designated day or each month (in case of a monthly SIP), the predetermined sum of money is deducted from the registered bank account of the investor. This sum is then used to purchase units of the scheme as per the applicable NAV of the fund. Because the NAV of fund units vary day to day, the number of units purchased would vary from one SIP transaction to another. When the NAV is higher, the number of ICICI mutual fund units purchased will be lower conversely the number of fund units purchased will be higher when the NAV is lower. This forms the basis of a unique feature of SIP termed as “rupee cost averaging”.

Also Know: What is ICICI Prudential Systematic Investment Plan?

The ICICI Mutual Fund SIP Investment Planner Calculator is a unique tool designed to help a prospective investor determine how much he/she will need to save on a monthly basis in order to reach a target corpus value within a specified number of years. This data is important because, most individuals tend to be impulsive spenders i.e. they will often spend on things that might be unnecessary luxuries at the cost of missing out on important investment targets. The ICICI SIP Investment Planner Calculator helps prospective as well as current investors determine their investment goals so as to achieve future investment targets with greater ease. The key variables that need to be provided by the prospective investor in case of this calculator include the target investment amount, the expected rate of return from the proposed investment(s) and the duration for which the investment will be active i.e. time available to reach the investment corpus. The answer provided will be in the form of how much the investor will need to save each month using SIP investments in order to reach the goal corpus by the end of the accrual phase of the investment. The following example provides a probable scenario.

Let’s assume an investor has a target corpus of Rs. 10 lakhs which she wishes to achieve in 5 years using SIP investments capable of providing returns of 12% per annum, which is the average provided by equity mutual funds operating in India. On providing this information, the calculator will provide the data that the investor needs to invest Rs. 12,244 per month during those 5 years in order to achieve her target corpus of Rs. 10 lakhs within the designated time period. This calculator however does feature a few drawbacks. For example, it cannot take into account multiple rates of return from different mutual funds and hence works on the principle of a single average rate of return. However in practice, market linked investments are almost never able to provide constant rates of return thus the final result may be invalidated due to market rate fluctuations. Additionally, the calculator assumes that the investor is able to make all her investments in a timely manner over the selected period. This too might not be realized in reality, which may necessitate making adjustments to the calculation at a later date. Thus the output of this calculator must be taken in the context that this tool is not infallible and further adjustments may need to be made at a later date.

Every mutual fund related document whether it the SID, KIM or a marketing brochure is bound to feature a line which more or less says that past performance of a fund is no guarantee that similar performance will be maintained in the future. This is mainly because capital markets are by and large unpredictable hence there is no certainty regarding which way a fund’s performance will be headed in the future. However, the ICICI SIP Past Performance Calculator does serve a very important purpose- it lets investors figure out how the fund has performed historically during various bull and bear phases of the market cycle. This helps in determining a suitable investment choice as a fund which has historically offered high returns while minimizing losses is a better choice of investment as compared to other options.

This calculator requires investors to fill out some key criteria such as name of the specific ICICI mutual fund scheme, the individual SIP installment amount, the start and end date of the SIP and date on which the value of the available units was obtained. For example, an investor has invested in the regular plan of the ICICI Prudential Long Term Equity (Tax Saver) Fund from April 2016 to March 2017 through a SIP of Rs. 2000 per month and the date of valuation is the 1^st of November 2017. In this case, the result obtained will show that a total investment of Rs. 24,000 over the period, the investor’s total units of the fund would be worth Rs. 28717, which represents absolute returns of 19.66%. Based on this information, the investor is likely to conclude that the investment in this fund would have been a relatively good option if that investment were made at the stated time. However, whether this performance is a one off or has been equally good in the past can only be determined by using this calculator multiple times across different time periods when this fund has been available for investment by the investor.

The ICICI SIP Future Value Calculator is by far the simplest calculator available to the investor. The simplicity of this calculator makes it an easy to use tool for even novice investors such that they are easily able to estimate the future value of their investments. The key data required to obtain a result in case of this calculator are the SIP installment amount, the SIP tenure as well as the expected rate of return. This calculator differs from a standard recurring deposit value calculator as the compounding occurs continuously instead of annually as in case of a fixed rate of return-based calculator. For example if an investor were provided the ICICI SIP Future Value Calculator with data such as monthly SIP amount = Rs. 5000, SIP tenure = 12 months and expected rate of return as 10%, the future value of such an investment will be immediately calculated as Rs. 62,828 for a total investment of Rs. 60,000 over the 1 year time period. This value is of course subject to change in case any of the variables are increased or decreased.

It is good practice to remember that all the above ICICI SIP calculators are just tools that provide estimates and they cannot be expected to provide a completely accurate representation of the future. The main reason for the discrepancy between reality and results obtained arises from the fact that the calculator uses data provided by the user. With input data being estimates, it is only natural that the final results are estimates as well.