SIPs (Systematic Investment Plans) are a simple way of investing small amounts on a regular basis to help boost your financial wealth. It is one of the most reliable strategies to diversify your portfolio and earn high returns over time, and you’ll need the Mutual Funds SIP calculator on a frequent basis to estimate returns.

SIP takes advantage of the market turbulence, and it can help bring down your total cost of investment over time by averaging rupee costs. When the market falls (volume gain), investors buy more units, and when the market rises, they buy fewer (value gain).

But, before you actually invest in a SIP, don’t you think it’s important to know how much money you’ll make? This is when the sip calculator enters into play. This online calculator keeps you up to speed by estimating the returns on your mutual fund investments.

What exactly is the SIP Calculator?

An online financial tool called a Systematic Investment Plan (SIP) calculator can help you determine the returns on your SIP investments. The calculator also shows you how much you’d have to invest each month to reach your goal. Simply defined, it serves as a road map for achieving various financial objectives. It uses historical data to help determine future returns.

How Does a SIP Calculator Work?

A SIP calculator usually has three data entry fields. They are:

● Amount of monthly investment

● Period of investment

● Annual returns expected

You must enter the monthly amount you desire to put in a fund. For example, depending on the amount you choose to invest, it might be as low as Rs. 500 or as high as Rs. 10,000 (or more).

The duration of the investment should be entered next. You must choose the length of time you want to invest in the fund via SIP. In most cases, fund houses demand investors commit to a SIP for at least six months. However, you may choose to invest for a longer length of time in order to attain more realistic profits.

After that, you must input the expected rate of return on the investment. The fund’s prior performance is used to calculate this value. After you’ve entered these values, the calculator computes how much money you could make in the given time frame. You can play with the values in the investment app to see what works best for your financial goals.

Here’s an illustration of how the SIP calculator works:

Assume you want to invest Rs. 5,000 every month for the next ten years. The anticipated rate of return is 10%. You must enter these figures into the appropriate fields, and the calculator will calculate the amount of money you will receive. In this situation, your return will be roughly above Rs. 5.6 lakhs. Thus, you would have a total earning of above Rs. 11 lakhs.

What are some of the benefits of using a SIP calculator?

An online SIP calculator provides a handful of additional benefits in addition to calculating the amount of returns you’re likely to earn by investing in a Systematic Investment Plan.

It assists you in determining the amount of investment required.

You may simply assess the amount of investment required to meet your investing goals by putting different amounts through a SIP return calculator.

It takes only a few seconds.

The programme is quite simple to use and understand. All you have to do now is enter the figures into the calculator and press the submit button. The programme will compute and display the estimated returns for you automatically.

Benefits of investing in a SIP

When investors choose to invest in mutual funds online through SIPs, they gain a number of financial advantages. Here is a handful of the most important:

● Rupee cost averaging

You don’t have to worry about market timing when you invest via SIP. Rupee cost averaging ensures that you buy additional fund units when the market is down and lesser units when the market rises with SIP investing. It enables investors to make fair returns while avoiding volatility in the market.

● The power of compounding

Let’s say, if you invest Rs. 10,000 in a mutual fund (at a 10% annual interest rate), you will receive Rs. 1,000 in interest at the end of the year. You now begin earning interest on both the original Rs. 10,000 you invested and the Rs. 1,000 you received as interest.

This can accumulate into a sizable sum of money over time. Consider the case when you put Rs. 5,000 in a mutual fund with a 12-percent yearly return. You will earn Rs. 25 lakhs if you invest in this fund for 15 years. If you keep investing for another five years, you’ll have a corpus of Rs. 50 lakhs. Your corpus will double in five years. This is the power of compounding.

●Investing in SIPs is simple

SIPs are a simple way to invest in mutual funds. Simply provide an auto-debit authorization to your bank account once you’ve determined the amount you want to invest. This delivers the investment money to the fund directly.

Things To Keep In Mind Before Making a SIP Investment

● Make a list of your objectives and devise a strategy to achieve them using SIP.

● Determine the monthly/quarterly SIP required to meet your objectives.

● Choose the scheme(s) in which you want to invest.

● Invest for the long term, as the power of compounding and rupee-cost averaging operate in tandem throughout market cycles.

● Diversify your assets by enrolling in many SIPs with various plans to maximize your profits.

Conclusion

Because the formula to calculate returns is a little complicated, the SIP calculator is extremely convenient. You have to enter the amount you want to invest each month. Then enter the projected rate of return on the investment. It will show you your annual returns based on the specified interest rate. The calculator illustrates how the power of compounding allows small investments to yield significant returns over time.