SIP Calculator – A free online tool to calculate future returns on your monthly SIP investments. It will give a rough estimate on your final maturity amount.
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What SIP?
Systematic Investment Plan (SIP) is a frequently used term by mutual fund companies. It is one of the methods of investing in mutual funds and the other method is a lump sum. SIP is a process of investing a fixed sum of amount into selected mutual funds at regular intervals weekly, monthly, and quarterly. For retail investors, SIP offers a well-disciplined approach to investing and creating wealth in the long term.
What is SIP Calculator?
A SIP calculator is a simple tool that allows individuals to get an idea of the future returns on their mutual fund investments made through Systematic Investment Plan (SIP). Investing through SIPs in mutual funds is a popular investment option for millennials. However, the actual return from the mutual fund scheme varies depending on several factors. The SIP calculator does not account for the exit load and expense ratio (if any). It is an online tool to calculate the SIP amount to achieve your financial goals, based on an expected annual return.
How can a SIP calculator help you?
SIPs are a more lucrative mode of investing money to become financially disciplined and create a habit of savings that can benefit you in the future.
A SIP calculator is a beneficial tool, which shows the estimated returns you will earn after the investment tenure for the given amount with the expected percentage of returns.
Few of the benefits of SIP calculators include :
- Assists you to determine the amount you want to invest in.
- Tells you the total amount you have invested.
- Gives an estimated value of the returns.
What are the benefits of SIP?
- Disciplined Saving: Systematic Investment Plan builds a discipline of investments. When you invest through SIP for a long term, you commit yourself to save regularly. Each installment of SIP is a step towards attaining your financial goals.
- Flexibility: It is a fact that you should continue your SIP investment for the long term to generate better returns in the future, however, there is no compulsion. You can choose to discontinue the SIP plan at any time during your investment cycle. You can also increase or decrease the amount of money being invested in a fund.
- Long-Term Gains: SIP as an investment tool, holds the potential to deliver lucrative returns over a long investment horizon due to rupee-cost averaging and the power of compounding.
- Convenience: There can be no convenient way of investing other than SIP for beginners. You can start SIP online or offline through any banking and financial service provider. Also, you do not need a large lump-sum amount to start a SIP, just start with as low as Rs 100 only.
- No Need to Worry About Timing the Market When you invest through SIP mode, you do not need to worry about timing your investment at all. At times when the markets are high, your monthly SIP buys you less number of units of a mutual fund. When the markets are low, the same monthly SIP amount buys you more units. Therefore in the long term, the buying price per unit will be averaged and you do not pay very high prices for any unit of a mutual fund. This is called the rupee cost averaging.