The online SIP calculator is an essential tool to help you plan an organize your financial goal upon investing on mutual funds. Many people prefer investing on mutual funds and segregating certain amount of their monthly income aside. To know how much wealth gain you will have after years of investment, SIP calculator is the best. SIP is a systematic investment option where you invest a certain amount of your income in a mutual fund. With SIP, you can invest monthly, weekly, or quarterly.
What is an SIP Calculator?
A SIP calculator is an essential tool and is a part of financial calculators allowing investors to estimate the returns on their SIP investments in mutual funds. Today, many millennials who are into working professionals prefer SIP as the ideal investment option with the aim of long-term earning goals. It has recently emerged as one of millennials’ most well-liked investment choices.
Several calculators for mutual fund SIPs are available to help prospective investors estimate their mutual fund investments. These online SIP calculators offer accurate results on wealth growth and anticipated returns from your monthly SIP investment. Based on the estimated annual return rate, you will receive a ballpark estimate of the maturity amount for each of your monthly SIP investments.
How does the SIP Calculator work?
Mutual fund experts believe that SIPs are a more profitable way to invest money than lumpsum payments. It assists you in developing sound financial habits and discipline that will serve you well in the long run. An online SIP calculator is a valuable tool that helps you understand the projected returns you will receive at the end of the investment period.
The SIP calculator works on the compound interest formula serve. The returns on mutual funds are driven by compound interest. The formula used is-
FV = P [ (1+i)^n-1 ] * (1+i)/i
- FV = Future Value
- P = Regular investment amount
- i = Rate of return
- n = Number of installments
Suppose you invest 5,000 monthly in a mutual fund with an annual interest rate of 12% for 15 years. You can use a SIP calculator online to get the result. The calculator will show the total wealth gained- Rs 16,22 880, invested amount- Rs 9,00,000/- and real wealth- Rs 25,22,880/-
What Features will you get with the SIP Calculator?
These SIP calculators have multiple features. Some of these are-
- User-Friendly Interface
SIP calculators online carry user-friendly interface that makes the process easy to use or calculate. The calculator is easy to use regardless of your experience as an investor.
- Offers Accurate Results
The SIP calculator offers close-to-accurate results for the calculation done. Investors can get accurate estimates of the future worth of their assets by entering pertinent data, such as the investment amount, length, and estimated Rate of return.
- Saves Time
With an SIP calculator, there is no need to perform complicated calculations. Investors may get fast results with a few clicks, saving time.
What Benefits do you have using SIP Calculators?
Using an SIP calculator can offer you multiple benefits. Some of these are-
- Make Informed Decisions: Since there are no informed decisions, a SIP return calculator assists you in making data-driven decisions.
- Make Financial Plans– Setting financial goals is vital. The SIP calculator helps to organize your investments or financial plans.
- Risk management: A SIP calculator helps you evaluate the risk involved and make a suitable investment, keeping long-term goals in mind.
SIP investment can be a tremendous wealth-gaining financial strategy. You must set aside a specific monthly income for the SIP. Similarly, an SIP calculator is an essential tool to help you plan your investment accordingly.
FAQs – SIP Calculator
1. How does an SIP work under financial strategy?
Ans. In SIP, investors must designate a predetermined amount to be invested in a mutual fund. It can be either monthly, quarterly or on a more frequent basis using SIPs. Investor-specific units of mutual funds are in proportion to the amount selected, automatically deducted from their bank account.
2. Which mutual funds are worth investing in as SIP?
Ans. There are different mutual fund options available to invest under SIP. You can check out the top mutual funds online.
3. What is the maximum tenure to invest in SIP?
Ans. There is no maximum tenure to invest in SIP, but the minimum is 3 years.
4. Do SIP calculators work best?
Ans. The online SIP calculators give close-to-accurate results. The total wealth gain depends on the interest rate at the withdrawal period.
5. What are the different types of SIPs available?
Ans. There are types of SIP including –
a) Step-up or top-up SIP: This type allows you to set up automatic investments at certain intervals at a specific amount or percentage.
b) Perpetual SIP: With a perpetual SIP, there is no expiration date, and you can continue investing for as long as you choose.
c) Trigger SIP: Using a trigger SIP, you can begin investing at a particular index level, date, or occasion.
6. Is it possible to pause SIP?
Ans. Yes, you can pause SIP investment for a certain period. However, it is advised not to halt for a long time, which would affect your wealth gain.
7. Can the SIP amount be modified?
Ans. It is possible to modify the SIP amount or even check the total return after a year using the SIP investment calculator.