A Systematic Investment Plan (SIP) calculator is an online financial tool that can help to calculate the returns you would earn on your SIP investments.
The calculator also tells you how much you would need to invest every month to earn a target corpus. Simply put, it provides a roadmap to achieve your various financial goals.
The calculator can be highly effective in automatically computing complex financial calculations, without the need for a pen and paper. You merely need to provide a few inputs, and the calculator arrives at the result in a matter of seconds.
How to calculate SIP investments? That is the big question for many investors. The answer is a mutual fund SIP calculator online.
The SIP Calculator uses the data you feed-in, for computation of the absolute value of your investment. Given below are some of the important steps that you must follow while using it.
- Imagine you wish to invest Rs. 4,000 per month for 10 years. The expected rate of return is 10%. You need to input these values in the specified boxes, and the calculator gives you the corpus you would earn.
In this case, you would earn a total corpus of Rs. 8.3 lakhs. If you were to increase the investment amount to Rs. 5,000, you would earn Rs. 10.3 lakhs. This is how you can tweak the values to see how your investments would turn out.
This step involves the approximate rate of return on your investment. It is calculated on the basis of the fund’s track record.
This included the tenure of the investment in case of an SIP maturity calculator. You need to decide the time period for which you plan to invest. The minimum period in an SIP is six months. It is always advised to stay invested for longer periods to gain higher returns.
If you have an ongoing SIP then you need to enter the number of installments you have already
You can use an SIP calculator online. You can change the variables more than once to get an idea of your returns. The calculator accounts for capital gains and possible inflations as well.
The SIP is one great way to optimize your Mutual Funds Investment. It offers benefits, over the long term, starting with a small amount. But before you invest your money.
it is important that you understand which SIP will help you fulfill your goal. To help you make the most of your investment, the SIP Calculator is an online tool to consider.
Accurate Results: You can get accurate results, with the help of the SIP Investment Calculator. It is the first basic to taking calculated risks. You need to enter details such as the Amount you will set aside monthly, Duration, and the expected Return.
Whether your needs would be fulfilled by investing in Liquid Funds, Debt Funds, or Equity ones? With such information, you’ll get to know the total invested amount, total maturity amount, and the amount that you’ll earn on your Mutual Funds. This system removes the need to manually calculate your returns, where a mistake may occur.
Faster Results: The SIP calculator gives you much faster results than manually calculating the same. And, you get information regarding your total invested amount, your total maturity amount, and your total SIP income in one calculation itself.
This way you won’t have to perform multiple calculations to get these different amounts. The added bonus is that you can access it online at any time, without needing to do the math or searching for a physical calculator.
Helps you choose better: One of the key benefits of using a SIP calculator is the fact that you can forecast your investment options and look at different outcomes.
You can choose to change the duration or the amount you can set aside to check how your SIP may be affected. This, in turn, helps you choose the best tenure and amount in order to harvest the most profitable returns.
You can make the investment to fulfill your long-term goals. For example, you estimate that you will need a monthly pension of Rs. 25,000 post your retirement. Now, with the help of the SIP Calculator, you can forecast the amount you would need to invest to reach that required funds.
You make an informed selection: By being able to feed-in the interest rate on the SIP calculator, you can preview the potential returns on different SIPs that have the same time duration and same investment amount.
After comparing the results of these SIP options, you can easily understand how to invest in SIP. Because of this, you can choose the top SIP that will get your Mutual Funds to perform well and reap high profits.
Easy Availability: SIP Calculators are easily available online. And at most sites, they are free to use, as well.
What is the use of SIP calculator? SIP calculator is a simulation, which allows you to estimate the return on mutual fund investments made through SIP.
Investing through SIPs in mutual funds is a popular investment option for millennials. SIP calculators are designed to give potential investors a heads up on their mutual fund investments.
SIP or systematic investment plan offers you benefits like long-term gains, flexibility to withdraw or increase/decrease the investment amount, regular saving, and the facility to make minimum investments of Rs 500.
Over a period of time of consistent SIP investing, your average cost of purchase reduces to below the current NAV of the scheme. As an example, an investment of Rs. 5,000 per month made consistently over 10 years at an investment return of 12% can result in wealth accumulation of Rs. 11.50 lakh.
In order to get the best returns from a SIP it is essential to keep it running for the longest duration you can afford. If you intend to grow your wealth using SIPs, a minimum of 5 years of investment is recommended by most experts. You can also choose to redeem your SIP or sell the same in case you are dissatisfied.
Risk 1: The risk of SIP getting a negative return or price risk. Risk 2: The risk being able to get your money back quickly or liquidity risk. Risk 3: The risk of downgrade of a security or credit risk. Risk 4: The risk of the company not paying the owners of the bond their due or default risk.
If you are new to the world of mutual funds, an SIP is one of the best investment options for you. This way you will learn to make timely investments. You will be able to accumulate a large amount of money in a certain time period. Making an investment in mutual funds through an SIP will offer you good returns also.
- Systematic Investment Plan (SIP) Disadvantages
- SIP returns are lower in consistently rising markets.
- Limited options of SIP dates.
- Only Pre-defined Fixed Amount can be Invested by SIP.
- Stopping intermediate payment in SIP.
- Delay between actual application & start/stop of SIP.