SIP Calculator allows you to evaluate the returns you’ll get by making investment in small amounts of money in SIP at regular intervals over a period of time.
What is SIP Calculator?
SIP calculator is a free online tool, which allows the investors to calculate the returns on their mutual fund investment made through the process of SIP. In today’s day and age, SIP investment is considered as one of the most popular and safest choices of investment. It is specifically designed to provide potential investors with an update on their mutual fund investment. However, the definite returns obtained by a mutual fund scheme may vary based on different factors. SIP calculator does not calculate for the expense ratio or exit load (if any).
Why Use SIP Calculator?
In order to avail high returns on investment over a long period of time, it is very important that one should make systematic investments. Thus, SIP calculator or SIP investment calculator can play a key role in doing so.
With the help of a SIP Calculator, the potential investors can calculate the approximate earnings for a particular amount that is invested for regular intervals of time (generally the interval is monthly), at the completion of a specific tenure.
Moreover, if the investor wants to create a financial cushion to fulfil his/her long-term objectives such as saving for retirement or creating an emergency fund then with the help of a SIP calculator, the investor can estimate the amount s/he will need to invest in order to reach the required corpus.
How Does a SIP Calculator Work?
SIP investment calculator uses some important data to compute the absolute value of the investment. Here are some of the important steps that need to be followed while using the SIP calculator.
Step 1- Firstly, the investor will have to enter the monthly SIP amount that he/she wants to invest. In the case of mutual fund investment, a minimum amount of Rs. 500 can be invested per month. Whereas, for other investment schemes, the minimum amount of investment is Rs. 1000 per month.
Step 2- The next step includes an evaluation of the possible rate of return on SIP investment. On the basis of the fund’s track record, the process of evaluation is completed.
Step 3- The third step includes the tenure of the investment. In the case of SIP maturity calculator, it is very important for investors to decide the time period for which they want to stay invested. Generally, the minimum tenure to stay invested in SIP is for 6 months. However, in order to gain high returns on investment, it is better to stay invested in best SIP plan for a longer tenure.
One can use SIP calculator online. The investors can change the variables numerous times in a SIP investment calculator and get an estimate of the returns that they can earn on their investment. However, while using a SIP calculator, the investor must keep in mind that the calculator accounts for the possible inflation rate and capital gains tax while computing the value of the investment.
How Can a SIP Return Calculator Help you?
As advised by market experts, the best SIP plans are more profitable mode of investing funds as compared to the lump-sum investment. Along with the benefit of steady return, SIP investment helps to inculcate the habit of savings among investors and help them to achieve their financial objectives.
A SIP return calculator is an online tool, which calculated the estimated returns that the investor will earn after the completion of the investment tenure. Let’s take a look at how SIP returns calculator helps you.
- It assists an individual to determine the amount they want to invest in.
- Show the total amount of investment made.
- Computes an estimated value of the returns.
Advantages of using SIP Return calculator
Let’s take a look at some of the benefits of a mutual fund SIP Return calculator.
- With the help of a SIP investment calculator, investors can efficiently and strategically plan their investments.
- SIP calculator simplifies the complex calculations and helps investors to estimate the results, which enables them to make the right investment decision.
- The insured only needs to enter the details and the result is displayed immediately.
- SIP calculators can be used online, free of cost.
- SIP calculators simplify the process of investment both for experienced investors and first-time investors, alike.
- Once the estimated returns are calculated, the investors can plan their finances in a better way and can achieve the long-term financial objectives of life.
- Thanks to a user-friendly interface, the investors only need to provide few variables in order to know their SIP returns.
Q1. Is SIP a mutual fund?
People tend to believe that best SIP plans is either a mutual fund scheme or different from a mutual fund. Nevertheless, the fact is SIP is the investment style and not a scheme or fund or any investment avenue or a stock. SIP is a vehicle to make a periodical investment in funds or schemes of your choice.
Q2. Can I start SIP Online?
Yes. You can start a SIP online. You can make use of internet banking to start with online SIP.
Q3. Can SIP amount be reduced?
Yes, you can reduce the amount of your monthly SIP by stopping all or some of them and re-start a new one with a lower sum.
Q4. How can I cancel a SIP?
If you’ve started your SIP in an online mode, you can cancel your SIP by choosing ‘Cancel SIP’ option for your upcoming transactions. However, if you’ve started SIP offline, you need to visit the nearest branch or get in contact with a relationship manager to have your SIP cancelled.
Q5. What is a Lump-sum Calculator?
A lump-sum calculator calculates the maturity amount of a one-time or lump-sum investment made by the investor. You need to enter the amount of investment, tenure of investment and expected rate of return to estimate the maturity amount and the returns on investment.
Q6. What is Delay Cost Calculator?
Delay Cost Calculator aids you in understanding the impact of delaying your systematic investment by a particular year. You just have to put in your monthly investment amount, tenure of the investment, the anticipated return rate and the anticipated delay in the investments. Delay Cost Calculator shows the amount of maturity if the investment was spread over a planned number of years and the amount of maturity in the delayed time and the cost of this delay.
Q7. What is SIP Advanced Calculator?
SIP Advanced Calculator is an advanced form of the simple SIP Calculator. This calculator helps in evaluating the return after inflation. This tool gives a better idea of the maturity value considering inflation. You have to select the amount of monthly investment, expected rate of return, inflation rate to arrive at the maturity value, pre-inflation and post inflation, and tenure in years.
Q8. What is the maximum tenure of a SIP?
Ans- As per one’s own requirement and suitability, the investors can choose to invest in SIP for the tenure of 6 months, 1 year, 5 years or 10 years. The individual can also opt for a perpetual SIP which continues forever, till the time one stop it.
Q9. What are the types of SIPs available?
Ans- In order to cater to various requirements of the investors, generally there are 5 different types of SIP plans available in the market. These are as following.
- Top-up SIP
- Perpetual SIP
- Trigger SIP
- Flexible SIP
Q10. Can I pause my investments in a SIP?
Ans-Yes, there are various mutual fund companies, which provide the option of pausing the SIP investment for a specific period of time.
Q.11 Can I modify my SIP amount?
Ans- Yes, you can modify the SIP amount as per your own requirement and suitability. The flexible SIP option allows the investors to regulate the investment on the basis of the cash flow. In case of any financial crunch, the investors can choose to miss SIP payment for a few months and can start to reinvest in SIP when the financial condition stabilizes.
Q12. How much can I invest in SIP?
Ans- An individual can start making SIP investment with a minimum sum of Rs.500 and can invest up to the maximum as much as they want. There is no upper limit on the maximum amount of SIP investment.
Q13. How critical is it to select the right date to invest in SIP?
Ans- As SIP is specifically designed to simplify the process of investment, there is no hard and fast rule to choose a particular date of investment. Investors can choose the right date to invest as per their own suitability.
Q14. Can I renew a SIP?
Ans- yes, the investors can renew SIP in case the existing SIP expires.
In order to renew SIP, the investors need to quote the same FOLIO number (unique number allotted to each MF investors) through the financial advisor of his Asset Management Company (AMC). Generally, it takes 20-30 working days from the date of sending request to renew the SIP plan.