If you want to be a successful investor and if you want to create a financial cushion for the future, then it is of paramount importance that the investment made by you should be in a systematic manner. The best way to ensure that your money is invested in the right direction is by investing through Systematic Investment Plan (SIP) and SIP investment calculator plays a vital role in doing so. As SIP is the simplest and disciplined process of making an investment in mutual funds, with the help of SIP calculator the investors can compute the absolute value of the amount they should invest at regular intervals of time and the estimated returns they will receive against the installments made.
Moreover, with the help of SIP calculator, you can also plan for the long-term financial objectives such as child education, savings for retirement, etc. the usage of SIP calculator is very simple and hassle-free. All you need to do is to follow a few simple steps in order to calculate the returns on SIP investment. For your knowledge, further, in this article, we have elaborately discussed how to use SIP calculator and its benefits.
Step by Step Guide to Use SIP calculator to Calculate SIP Investment Returns
In order to calculate the absolute value of the investment, some important data are used by the SIP calculator. These are the steps that you are required to follow while using SIP investment calculator.
Step1- Enter the monthly SIP amount that you want to invest in a mutual fund. In mutual fund investment, you can make a minimum investment of Rs.500-Rs.1000 through SIP, whereas, there is no upper limit in the maximum amount of investment.
Step2- Based on the return rate of a particular investment scheme, the SIP calculator calculates the estimated returns. In order to estimate the approximate rate of return, you will be required to analyze the track record of the funds.
Step 3- In the final step, you will need to provide the details of the investment tenure. The longer you stay invested in SIP higher the returns you can reap in a long-term.
Based on the above-mentioned criteria, the SIP investment calculator displays the ultimate value of your investment at the end of the investment tenure as chosen by you. As the usage of SIP calculator is free of cost, you can easily change the variables to evaluate the various returns that you can receive against their investment.
Benefits of Using SIP calculator
Let’s take a look at the benefits of using SIP calculator.
- With the help of Sip calculator, you can plan your investments more accurately. The formula to estimate the value of the return is extremely complex and if done by hand the results are likely to have an error due to its complexity. The SIP calculator simplifies the calculation process and helps you to attain the accurate result so that you can make an informed choice.
- The SIP investment calculator can be used by both, market experts and those who are investing for the first time. As SIP calculators are totally free of cost, you can use it online by visiting the website of any MF schemes.
- SIP calculator offers user-friendly interface, you just need to enter a few variables in order to know the SIP return.
Benefits of Investing in Mutual Fund through SIP
SIP offers investors a strategic approach towards investment in which they can make an investment of a fixed amount of money every month at a predetermined date. There are various benefits of investing in MF through SIP, let’s take a look.
- Apart from the advantage of accumulating wealth in a long-term, one of the major benefits of investing through SIP is that it provides a disciplined approach towards investment. Through SIP plan, you are bound to invest a specific amount at a predetermined date regardless of the market condition.
- As a goal-oriented investment option, the SIP plan helps to fulfill the short-term and long-term financial objectives of life. You can plan to achieve your financial objective within the estimated tenure by making a minimum investment of Rs.500 through SIP.
- With the benefit of the power of compounding, you can reinvest the interest earned on the first investment in the fund. Thus, by investing a small amount regularly, you can accumulate corpus over a long-term period.
- By investing through SIP, you do not need to time the market. This means that at the time when the market is high SIP provides an opportunity to purchase less number of mutual fund units and when the market is low, the investors can buy a number of units in the same
Wrapping it Up!
You can achieve your short-term and long-term financial goals by investing in SIP plan regularly. As compared to the lump-sum investment SIP is more beneficial as the amount invested in on a monthly basis, so there is very less or no impact of the market violation. Moreover, SIP funds provide you the flexibility to create, update or cancel SIP anytime. By comparing the changing rates of SIP you can choose the most lucrative scheme according to your own choice.
