Why Should You Use A SIP Calculator?

marufa khatun

2 years ago

Nowadays, the world has become an uncertain place to live in. Hence, several people are on the lookout for fruitful investment opportunities that yield more rewards than traditional investments like fixed deposits. With inflation only bound to rise in the future, individuals seek plans and investments that will not only help them to save their money, but grow it. Life has many milestones, such as a child’s higher studies, marriage, etc, and planning for each stage requires a consideration of finances.

While you think of building wealth for a future corpus, you undoubtedly wish to pick the right investments that may result in your wealth growing. Once you gain profits from your investments, you can always reinvest and create more wealth. In your search for investments which assure you a degree of safety and assured gains, you may think of a Systematic Investment Plan, or SIP. Nonetheless, before you jump in and invest, it’s a good idea to consider your investment amount and have a rough estimate of your returns. A simple online tool, the SIP calculator can help in your effort.

First Know About a SIP

While considering any kind of investment plan, doing some groundwork can help. Firstly, you should know about a SIP and how it can help you with your financial aims. A SIP suits investors who wish to invest small amounts of cash on either a monthly, quarterly, or half-yearly basis. You also have the choice of investing a lump sum initially. In some SIPs, you can even make weekly fixed payments to your SIP account.

The money that you invest in a SIP is used for investing in mutual funds that give you returns over a period of time. Thus, your SIP has a tenure or term. You can choose your term, but the longer you stay invested, the greater are the estimated returns you will see, and you can use a SIP calculator online to gauge potential returns on investment. Mutual funds invest your wealth in securities, and depending on conditions of the market, prices and returns may fluctuate. Therefore, like stock investments, SIPs have a high chance of showing good returns in the long term.

Easy Way to Invest

If you wish to have a stable investment in a diversified portfolio, a SIP is a good investment. It is also great for small investors, as the minimum amount you can invest monthly is Rs. 500. You also get a tax benefit while you invest amounts in a SIP, and this can save you money while you grow it. The process of investing in SIPs is convenient and can be undertaken online. To know how much to invest and when, according to your individual financial goals, your tenure and your expected returns, you can use a SIP calculator to plan your investment.

To use a SIP calculator, all you have to do is to enter your details of a SIP plan, such as the amount you may want to invest, the investment interval, the term of investment and the estimated rate of returns (based on the history of the mutual fund investment chosen).

Reasons to Use A SIP Calculator

Online tools are common while choosing many financial products that have a tenure attached. Online calculators are used to judge the benefits of purchasing life and health insurance, financial investment plans like a SIP, and for many more financial purposes. A SIP calculator is a utility tool, available to SIP investors. This is offered online and is free to use on the portal of any company through which you wish to invest. You may be still wondering why you should use one. The reasons for using a SIP calculator broadly translate to its advantages of use. These are detailed below:

Ease of Use – The online calculator is simple to use. New users and seniors alike can use it conveniently. On any portal with the SIP calculator, customers get a user-friendly method to compute amounts flexibly.
Better Planning – It is easy for you to plan and estimate your required finances if you know your investment amount and the returns you will get. With an organised means, such as that of a SIP calculator online, your budgeting becomes clearer.
Free of Charge – There is no charge when you use an online SIP calculator.
Understanding SIPs Better – When you use a SIP calculator, you can grasp the way in which a SIP works better than just by reading about it.

Worthy Investment

Using a SIP calculator is a logical way to plan your investment better. As far as your finances go, planning is the key to fruitful investment, and a SIP calculator can help you to know exactly how much to invest, and for what tenure, to meet your financial goals of the future. You may also fill in the intervals of choice you wish to invest with, and check if any meet your characteristic needs.