Sound financial planning is the foundation of a successful investment journey. Financial planning involves identifying your investment goals, risk tolerance, and a mutual fund variant alleging with your goals and risk appetite. Once you determine a mutual fund type, you must select the investment mode that does not strain you financially. One is the lump sum mode, and the other is the systematic investment mode or SIP investment mode.
What are SIPs?
Systematic investment plans are a popular mutual fund investment strategy that enables you to invest a small sum monthly. You can invest either monthly or quarterly into a specific mutual fund SIP. SIP is a convenient mode of investing in your mutual fund. You should know the required investment amount if you are investing in your mutual fund through SIP. Use an online SIP calculator if you don’t know the amount to invest in SIP.
What is SIP calculator?
SIP calculator is an online tool that will help you determine a rough estimate of the returns or the monthly investment required. You could get the answer in just a few seconds by entering details like your financial goal or investment, expected returns, and investment horizon. An online SIP tool uses the following formula:
FV = P x {[(1 + r) n – 1] ÷ r} x (1 + r)
- FV – The investment’s future value
- P – The amount that’s invested
- r- The rate of return expected
- n- The total number of payments
How can SIP return calculators help?
SIP calculators are very accessible and free of cost. Use these online tools to compare different investment scenarios. Through this, you can determine how much you must invest or how much you can enjoy as returns.
What are the benefits of SIP calculators?
Here are a few advantages associated with these online SIP calculators:
Informed decisions
Using a mutual fund calculator plays a vital role in investment planning. A mutual fund SIP calculator can help you plan your finances wisely. Apart from planning finances, they can also help you determine the investment amount to achieve your financial goals without hassle.
Accessibility
Like everything online, SIP calculators are accessible regardless of time and location. Just search for an online SIP calculator, and you will find countless calculators.
Instant answers
A manual calculation is inherently cumbersome. With an online SIP calculator, you will get the estimated future value of your investment in a matter of seconds.
Easy to use
Online SIP calculators are easy to use. Enter or tweak a few parameters like your investment amount and the expected rate of return to get returns estimate or how much you must invest over time.
How to use online SIP calculators?
An online SIP calculator, a.k.a. mutual fund calculator involves the following steps:
- Enter the amount that you intend to invest every month or your financial goals
- Modify your investment duration and expected annual returns
- After entering these inputs, the SIP calculator will show your returns for that chosen period
You can use the calculator multiple times to compare different investment scenarios.
Online SIP calculators have changed the way we invest. You don’t need to enter personal details before using a mutual fund calculator. Just follow the steps above, and you will get all the answers.