The key to financial success in life is lots of hard work and dedication. However, a systematic investment plan (SIP) can parallelly run your success in progress, benefitting you more.
An SIP is one of the best ways to invest a fixed amount every month or quarterly in mutual funds step-by-step. You can adjust the period of investment as per your need. This step-by-step investment averages out the investing and benefits you from compounding interest.
The longer you leave your money invested, the more you get compounding returns, even for a small SIP. This is why you hear people saying to invest and forget about the returns.
However, there are a number of banks offering different systematic investment plans, but HDFC is providing the best. It's because you get flexible SIPs that can be availed easily. Thus, if you want to create good wealth through investments apart from your salary, bring your money to work.
What does the bank say? According to the HDFC SIP plan, you can choose any investment plan for your desired term period only subject to the minimum amount required to start your SIP journey.
So, let's get started and check more about the SIP and why, to begin with, HDFC.
What is an HDFC SIP Calculator?
Systematic investment plan (SIP) is for those who don't want to burden lump-sum investments and analyze the market every hour. Also, if someone wants to start their investment journey with smaller and affordable figures at regular intervals, then for sure, SIP heeds at the top.
It's better to start with a small investment and turn it big, rather than gambling with high risk, as the internet is full of ways to become a millionaire in one night.
With HDFC, you can calculate your flexible SIP return using their calculator on your monthly SIP investment after choosing the fixed tenure.
Here's how you calculate your yields:
First, you have to input the SIP investment amount you will constantly be giving.
Then after this, you have to select the number of installments that varies as per the investment period.
- The submit button will show you the exact return after the term set and total investment till that date.
Even with this final result, you get a graphical representation to track your returns on that investment at a particular time instance in between the tenure.
It is all you see in the frontend. However, what happens in the backend and how the returns are calculated are discussed below.
How Does the HDFC SIP Calculator Work?
The returns on the HDFC SIP are computed according to the compound interest to determine the probable return on the respective SIP based on your investment. The SIP calculator attains this estimation of returns by considering the number of times compounding is appropriate.
Alongside all the returns it shows, it also demonstrates the relative analysis of the SIP return against all different FDs.
The SIP calculator needs a specific amount from the user to calculate the same. These amounts are to be invested in the chosen SIP every month for the given tenure of investment until the SIP matures, and it will indicate the anticipated rate of return of the best-chosen SIP.
As soon as the consumer decides the SIP monthly amount and enters the same in the calculator, the HDFC SIP calculator will evaluate and indicate the respective maturity amount to the consumer.
Moreover, the calculator also provides you with an approximate revenue obtained through the mutual funds' investment.
On the contrary, the consumer can even calculate the monthly SIP by entering the target maturity amount they aim to acquire after some years when the SIP matures. This is done by reversing the SIP calculator.
The individual must initially decide the target amount they wish to gain after some years and enter the same in the calculator.
Based on the entered amount, the HDFC SIP calculator will calculate the amount to be invested on a monthly basis in the chosen SIP. The calculator estimates the amount of time along with the rate of returns on that particular SIP scheme during the calculation of the monthly investment.
Why Should You Invest in the SIP?
There are many advantages to investing in SIPs.
With an SIP, you become more disciplined towards your investments and help save accordingly.
You could start with a small amount which will accumulate eventually as the SIP matures.
- While investing in SIP, you don't need to worry about timing in the market while investing your money.
- The main advantage of the SIP is that the individual obtains the benefits of compounding.
- SIPs are flexible; you can stop the investment anytime you want and skip the funds if you are running low on investment.
How is the HDFC SIP Return Calculated?
The HDFC SIP calculator is digital equipment used to tally the rate of return from a SIP investment that the user has chosen as per their convenience.
This HDFC SIP calculator is a tool that operates or functions on its own to take the input from the user and estimate the rate of return on that particular investment.
The rate of return is calculated just through a simple process wherein the consumer gives the input to the calculator based on which the calculator evaluates the rate of interest for the user.
To know the rate of return on any SIP, the investor has to put an investment amount in the calculator, expected rate of interest, step-up percentage, and duration of that particular investment or tenure of the investment.
As soon as the user completes all the aforementioned instructions, the HDFC SIP calculator will show the exact format of the SIP comprehensively.
This comprises several charts along with graphical representation as well. The result will indicate the maturity amount of the SIP, and the total amount the investor will gain.
This HDFC SIP calculator functions in two different calculation ways- the investment amount and the other is the target amount. In the first case, the investor is aware of the SIP they can pay every month until the SIP matures.
The latter one will help the individual calculate monthly SIP based on their target amount; for this, they will have to know the targeted number the investor wishes to accumulate in a particular interval period. The time duration will also be as per the investors' convenience.
Note that the HDFC SIP calculator will provide the estimation based entirely on the investors' input, so investors must enter the amount and all the other required information accordingly.
The HDFC calculator just provides a reasonable indication, but it does not assure the rate of return on the same.
The factor that will affect the rate of return will be the mutual fund's performance. Also, the actual rate of return on the SIP might differ from the one estimated by the HDFC SIP calculator.
It might be higher or lower than the amount evaluated by the calculator again based on the performance of the SIP.
Best HDFC Mutual Fund SIP Plans to Invest
HDFC Mutual Fund AMC provides a wide range of SIP plans that vary concerning investment capital, tenure, and risk management. A high return to the investment can be a bit risky too, but that risk to profit ratio is 1:10 with HDFC Mutual Fund SIP plans.
Below, we have listed some best HDFC Mutual Fund SIP plans to create wealth and gain long-term investment returns, we have created a tabular comparison as this is easy to understand and compare.
Points to note before you move directly to the table:
Total SIP Investment is taken as Rs. 60,000/- annually.
- Step-up (%) taken for each listed fund is 10% annually.
- Returns from the HDFC mutual fund SIP plans are entirely based on the fund's past performance.
- You may see the variation in returns as per the market performance.
Fund | Return(3 years) | Return (5 years) | Return (10 years) | SIP Maturity Value (20 Years) |
HDFC Index Sensex Fund | 18.60% | 17.80% | 14.40% | ₹ 1,95,13,752 |
HDFC Mid Cap Opportunities Fund | 21.50% | 16.10% | 20.30% | ₹ 1,58,51,465 |
HDFC Flexi Cap Fund | 17.60% | 15.10% | 15.30% | ₹ 1,40,81,631 |
HDFC TaxSaver Fund | 15.40% | 12% | 13.80% | ₹ 1,02,71,499 |
HDFC Index Nifty 50 Fund | 19.30% | 17% | 14.40% | ₹ 1,76,77,432 |
Frequently Asked Question
Q1. Which SIP is best in HDFC?
There is not a single SIP that is best, but many. Let's see some of them.
- HDFC Mid-Cap Opportunities Fund, which has around 9.88% of return in 5 years
- HDFC Hybrid- Equity Fund, which has 1.58% of return in a year while 9.95% return in 5 years.
- HDFC Top 100 Fund has 9.63% of return in 3 years whereas 7.78% in 5 years.
- HDFC Liquid Fund.
Q2. How can I open an SIP in HDFC?
Here's the list of steps you need to follow to open a SIP in HDFC-
- Step 1: Accumulate all required documents.
- Step 2: Get your KYC done.
- Step 3: Register yourself on the AMC site.
- Step 4: Choose Investment Amount and the plan that best fits your investment and option.
- Step 5: Choose Payment Mode and the day you wish to open SIP.
- Step 6: Complete your payment.
Q3. What is the HDFC SIP interest rate?
With different investments plans or SIPs, you get a different interest rate. Also, the tenure you selected will affect the rate of interest.
Check what you get as a return in different HDFC SIP plans-
- HDFC Opportunities Fund - 11.54% return in 5 years.
- HDFC Blue Chip Fund - 10.02% return in 5 years.
- HDFC Balanced Fund - 9.08% return in 5 years.
- HDFC Liquid Fund - 6.5% return in 5 years.
Q4. Can I pause/withdraw my SIP in HDFC?
Yes, you can pause your SIP for three months utmost.
However, know that you can only pause once.
As soon as the SIP pause interval terminates, the SIP is proceeded with on its own, and funds start getting debited from your account as per your SIP.
Note: Not every SIP comes with this pause feature in it, so choose accordingly.
Q5. Can we withdraw SIP anytime?
An investment in a SIP can be withdrawn at any instant as per the individual need. There are no such constraints on investment withdrawal. This is also one of the best beneficial facts about investing in SIP then FDs.