sip calculator

A Complete Cheat Sheet on SIP Calculator is Here to Read

Want to enjoy the high returns while preventing the pitfalls of equity investment? If yes, all you need to know about the SIP Calculator. That’s Right! This smart tool lets you know how small investments made at regular intervals can yield much better returns over a long period of time.

Moreover, the device will also help you to plan your Systematic Investment Plan without any hassle. Well, those who are getting confused as what this term is all about, read the article below to get the answer.

Furthermore, Systematic Investment Plan, commonly known as SIP is a fixed amount one invests at regular intervals in a financial instrument. This tool actually helps you to find the future value of your invested money after taking SIP into account for a specific duration at the expected interest rate.

However, when it comes to using the same, it is absolutely easy to use the same online by simply feeding the required credentials into the device. It takes into account

 

  • Monthly Investment Amount

  • Investment Period

  • Expected Annual Returns

 

More to the point, after feeding these details, you need to click on the Calculate button so that the device can fetch the values. One of the biggest advantages of this tool is that it calculates the wealth gain and expected returns of your maturity amount in just a few seconds. However, before discussing about the tool, let’s make you aware with the SIP first.

 

Read Also: Use Mutual Fund Calculator to calculate Mutual Fund Returns

SIP is a kind of investment scheme offered by many mutual funds companies. With the help of using the same, you can start investing a small chunk of money regularly either weekly, monthly or quarterly into a selected fund. Well, for retail investors, SIP is nothing but a well-disciplined and passive approach of investment while creating a wealth in the long-term. However, one thing that needs to be mentioned here is the fact that since the amount is invested at regular intervals of time, hence it also reduces the impact of market volatility. With a rough calculation of the maturity amount based on a projected annual return rate, you can easily plan your financial journey.

 

Before moving ahead, let’s just understand the benefits of SIP as compared to Lump Sum Investment:

 

  • It is a disciplinarity form of investment that keeps you away from the market   fluctuation.

  • You don’t need to speculate or focus on timing the market.

  • Usually, the amount is invested on a monthly basis, so there is little to no impact of market volatility.

  • Your passive and automated approach makes you more committed to guaranteed investment/savings.

  • It is very flexible- you can create/update/cancel SIP anytime.

  • It is pocket-friendly, with minimum SIP investment starting from as low as  ₹500.

 

Let’s just take the help from an example below to make you understand the concept of the same.

Suppose, Rakshit Verma, a 32- year-old, Sales Manager by profession wants to invest in a monthly SIP plan. Currently, his monthly income is  ₹40,000 and he wants to invest a small chunk of  ₹5,000 every month for his retirement. Thus, he decided to invest the same amount regularly for the next 20 years so as to reap the maximum benefits. He close friend suggested him to take the SIP plan being offered by a renowned bank giving the annual return of 17%.

Rakshit, before availing the plan wants to be sure about his maturity value. Yes, he is curious to know how much amount will be accumulated along with the returns in the next 20 years, if he regularly invests  ₹5,000. Thus, he used a smart and time-saving tool called the SIP Calculator , which actually helped him in knowing the exact calculation. So, according to his credentials, results came out to be:

 

 

Expected Amount:  ₹43.7 Lakhs

Amount Invested:  ₹12 Lakhs

Wealth Gain:  ₹31.7 Lakhs

These values came out with respect to an assumed inflation rate of 6% during these years. So, now you can clearly see how this magical device with its simple algorithm and fastest process allows you to know these values without any hassle. Else, just imagine the different scenario, where manually it was not everyone’s cup of tea to calculate the same. But need not to worry as you have this amazing tool available online to ease the burden.

Disclaimer- Mutual Funds are subject to market risks. Please read the scheme related documents carefully before investing.

 

 

 

 

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