The SIP calculator will let you calculate the wealth again and the desirous returns with the monthly investment of the SIP. The SIP investments in the mutual funds are one prominent investment alternatives for large masses lately.
What is SIP Calculator?
A SIP calculator is a simplified online tool, which permits individuals to have an idea in regards to the returns upon the mutual fund where the investment has been done through a SIP.The SIP calculator is designed in a way, which gives the investors who are potential enough and give an estimate on the respective investment of the mutual fund. Besides, it is important to understand that the actual returns provided by any of the schemes of mutual funds depend upon different factors. In the case of the expense ratio and exit load, the SIP calculator will not offer any clarification for the same. This gives you a rough structure and a fair idea upon the estimate on the amount of maturity for the SIP monthly on the premise of the projected yearly rate of return.
How to Use a Systematic Investment Plan (SIP) Calculator?
Using a SIP calculator is not a task is a much-simplified process. Therefore, to avail the estimate of the return upon the investment made on the mutual funds via SIP, you need to follow the below mentioned easy steps:
Step 1: Provide in with the duration of the SIP that means the period wherein you wish to invest in the scheme of the mutual fund. The duration of the SIP could vary from months to some years.
Step 2: Gauge the pace of profit for your investment. You can decide this by checking the presentation reputation of the scheme of mutual fund in, which you mean to contribute. You can get the insights about the profits of a mutual fund scheme to conspire either from the fact sheet, which is upon the website of the specific fund.
Step 3: The SIP calculator is either the month to month SIP sum that you intend to put resources into a mutual fund plan of your decision or the objective corpus. If you fill in the measure of month to month speculation you are prepared to make, at that point assessed returns at development time are given. If you are utilizing the number cruncher to assess how much cash you have to put resources into a common reserve plan to get a particular sum toward the finish of your SIP period, at that point enter the objective sum and calculator will give the data of a necessary month to month investment.
The SIP calculator will display the accumulated amount towards the end of the tenure of the policy. You can also see a comparison of the accumulated sum of the mutual fund invested along with the fixed deposits.
How Does SIP Calculator Work?
A SIP calculator essentially works wherein the users enter the values, which implies that the users need to provide the information in regards to the investment amount, investment frequency, investment duration and the returns expected.
Based upon the formula of compound interest, the SIP calculator has specifically been designed. The interest of compound powers the returns on the mutual funds. The SIP calculator also enables one to get a comparison of the offered returns by the mutual funds along with the deposits, which are fixed.
How Can a SIP Return Calculator Help You?
Many of the mutual fund specialists recommend SIP over any other mode of fund investment at helps you to be more disciplined in terms of finances and also instils the practice of savings that will help you for a fruitful future.
One can easily use a SIP calculator online and one can easily know the estimated returns that one would acquire post the tenure of retirement. It also helps you to determine the amount that one wishes to invest informs you in regards to the complete amount invested and gives you the estimated value on the returns.
Advantages of Using the Systematic Investment Plan Calculator
Listed below are the key advantages of using a SIP calculator:
- It gives you the estimate based on, which you can plan your finances in a better manner.
- The SIP calculator permits the individuals to have an estimation of the amount, which the mutual fund would accumulate towards the end of the tenure of the SIP.
- This estimation permits the individuals to opt the right sort of scheme of the mutual fund.
Mistakes to Avoid When Investing in SIP
When investing in SIP mutual fund be careful and avoid making the following mistakes:
- Know What to Invest: When investing in a SIP do not opt for an amount, which either is too small or too big. However, with passing time, the amount of investment should be increased keeping in mind the performance of the fund. Always choose an amount, which is optimal on the premise of your position in terms of finances and objectives of the investment.
- Not Taking the Long-term Way: It is often noticed that as soon as the investment starts giving returns the investors mostly withdraw. It is to be noted that a SIP will offer you maximum returns over long-term investment. Therefore, it is recommended to invest in a long-term SIP and attain good returns over time.
- Not Increasing the Amount of Sip Over Time: When you are confident about the performance of a fund, it is advisable to increase the SIP amount over time. This will help you to receive inflation-beating returns.
Q1. What are the benefits of SIP?
Ans. The following are the benefits of investing in a SIP:
- You can invest in small amounts continuously
- Choose for monthly auto-payment
- Better long-term advantages than a one-time investment
- No stress in regards to the market ups and the downs
- Helps to plan the budget and manage expenses efficiently.
Q 2. Are SIPs equivalent to mutual funds?
Ans. No, SIP is not equivalent to mutual funds. However, it is a medium of investing in mutual funds. In a SIP you will invest periodically than a lump sum amount.
Q 3. Is it true that SIP permits only equity mutual funds investments?
Ans. You cannot only invest in SIP through equity mutual funds but also hybrid and debt mutual funds.
Q 4. Can I reduce my SIP amount?
Ans. Yes, as per the needs an investor can easily either reduce or increase the amount of SIP.
Q 5. Is SIP safer than lump sum investments?
Ans. Yes, SIP is a safer option than lump-sum investment. Investment in a SIP has a low risk and the points of investment are spread out over a long period. The idea is simple the time the market is high, you can purchase some units of the fund and the time the market is slow you can purchase the same unit on the equivalent amount.
Q 6. Is SIP a mutual fund?
Ans. 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.
Q 7. Can I start investing in SIP Online?
Ans. Yes, You can start a SIP online. You can make use of internet banking to start with online SIP.
Q 8. Can SIP amount be reduced?
Ans. 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.
Q 9. How can I cancel a SIP?
Ans. 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.
Q 10. What is a Lump-sum Calculator?
Ans. 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.
Q 11. What is Delay Cost Calculator?
Ans. 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.
Q 12. What is SIP Advanced Calculator?
Ans. 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.
Q 13. 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.
Q 14. 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
Q 15. 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 16. 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.
Q 17. 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.
Q 18. 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.
Q 19. 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.