SIP (Systematic Investment Plan) delay calculator

SIP (Systematic Investment Plan) delay is a term used in investment that refers to the delay in the investment amount being processed or credited to the investor's account. This delay can occur due to various reasons such as bank holidays, weekends, or processing times.

What is SIP?

SIP stands for Systematic Investment Plan, which is an investment strategy that involves investing a fixed amount of money at regular intervals, typically monthly or quarterly, into a mutual fund or exchange-traded fund (ETF).

Here are some key terms related to SIP investment:

Investment amount

This is the amount that you choose to invest in the SIP at regular intervals.

SIP date:

This is the date on which your SIP investment will be made. You can choose the date as per your convenience.

SIP tenure

This is the period for which you want to invest in the SIP. It can range from a few months to several years.

-NAV

NAV stands for Net Asset Value. It is the price at which the mutual fund units are bought or sold. The NAV of a mutual fund is calculated by dividing the total value of its assets by the number of units outstanding.

Exit load

This is a fee that is charged by the mutual fund company if you withdraw your investment before a certain period. Exit load is generally a percentage of the investment amount.

Expense ratio

This is the fee that is charged by the mutual fund company to manage the fund. It includes various expenses like administrative costs, management fees, and other operating expenses.

Asset allocation

This refers to the distribution of your investment amount across various asset classes like equity, debt, and others. The allocation is based on your investment objectives and risk profile.

Portfolio rebalancing:

This is the process of adjusting the asset allocation of your SIP investment based on the market conditions or changes in your investment goals. It helps in maintaining the desired risk-return profile of your portfolio.

Rupee Cost Averaging

This is a strategy used in SIP investment, where you invest a fixed amount at regular intervals, regardless of the market conditions. It helps in averaging the cost of your investment over a period of time, thereby reducing the impact of market volatility.

Compounding

This is the process of reinvesting the returns generated from your SIP investment back into the fund, thereby earning returns on the returns. Compounding can help in generating higher returns over the long term.

Lock-in period

Some mutual funds have a lock-in period, which means that you cannot withdraw your investment before a certain period. This is generally done to promote long-term investment and discourage short-term trading.

SIP calculator

A SIP calculator is an online tool that helps you calculate the potential returns of your SIP investment based on various parameters like investment amount, tenure, expected rate of return, and others.

Fund manager

The fund manager is the person responsible for managing the mutual fund and making investment decisions on behalf of the investors. The performance of the fund largely depends on the expertise of the fund manager.

Asset management company (AMC)

The AMC is the company that manages the mutual fund. It is responsible for managing the portfolio, calculating NAV, and other administrative tasks.

Investment objective

This refers to the goal or purpose of your investment. It can be long-term wealth creation, retirement planning, children's education, or any other financial goal. Your investment objective will help you choose the right mutual fund and investment strategy.

What is SIP delay

For example, if an investor scheduled an SIP of $500 on the 1st of the month, but the amount was actually credited to the account on the 5th of the month, and the daily rate of return on the investment is 0.02%, the SIP delay would be: SIP delay = (4 business days) x (0.02%) = 0.08%

This means that due to the delay in processing the SIP, the investor missed out on a potential return of 0.08% on the investment amount.

It's important to note that the SIP delay calculation is based on the assumption that the investment generates a daily return rate, and that the rate remains constant throughout the delay period. In reality, investment returns can vary significantly from day to day, and may be impacted by market conditions, so the actual delay and impact on returns may differ from the calculated value.