Goal-Based SIP Calculator
A goal-based SIP calculator is a financial tool that can help you plan your finances as per your goal in the best way possible. It helps you calculate returns on predefined investments or the investment amount for a pre-decided financial goal.
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Goal-Based SIP
- Goal Based SIP Calculator
Goal-Based SIP Calculator
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How to Use Policybazaar’s Goal-Based Calculator?
A goal-based SIP allows an investor to assign a goal to every rupee that one invests. A goal-based SIP calculator can further help an individual to assign a goal to each and every rupee that they invest. This can not only help you track your money but also plan efficiently for the future.
To use Policybazaar’s SIP Calculator, follow the following steps:
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If you know your investment amount
- Choose between monthly SIP, yearly SIP or a lump sum investment.
- Choose your periodic investment amount
- Choose an investment period
- Choose a rate of return
- The calculator will display your final corpus
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If you know your goal amount
- Enter your goal amount
- Choose your investment period
- Enter an annual rate of return
- The calculator will display your periodic investment amount.
Benefits of Using a Goal-Based SIP Calculator
- Strategic Planning: A goal-based SIP calculator allows a person to understand their investment needs as per their goals. They can divide their investment into several buckets as per their goal and invest accordingly.
- Clarity and discipline: A calculator such as this also ensures that the investor has clarity on the investments they wish to make in the future. It allows people with different needs to check their estimated goal or investments and clearly define their goals accordingly.
- Measurable Progress: A goal-based SIP calculator enables investors to track their progress by comparing the current corpus value against the expected trajectory at any point. A shortfall from the projected path is visible early enough to make adjustments in your SIP before the goal date.
- Reduces Behavioural Drift: A goal-based SIP calculator helps investors determine the exact monthly investment amount and investment period required to achieve their financial goals, thereby eliminating uncertainty and facilitating systematic financial planning.
Goal-Based SIP V/S Regular SIP
The following table lists the key differences between Goal-Based SIP and Regular SIP.
| Parameter | Goal-Based SIP | SIP |
| Obective | The main objective is to define the role of every rupee invested. | Long-term wealth building |
| Measurement | The progress made by the investment for a particular goal is measured against a predefined time. | The investor assesses later what the corpus can be used for |
| Starting Point | The investor defines the amount of money they can invest periodically | Investor lists their goals and assigns a certain amount of money for each goal. |
Conclusion
A goal-based SIP calculator allows investors to define their investments as per their goals by allowing them to calculate the investment amount needed for a particular goal or the accumulated corpus that will be generated by them in the process of investing a predefined amount of money. To further ensure that you invest in the right place for the right goals, it is recommended that you go through the best investment plans and choose wisely as per your financial needs and risk tolerance.
FAQs
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How does a goal-based SIP calculator work?
A goal-based SIP calculator works by using your inputs about your financial goals, time horizon, investment amount and rate of return and provides you with your desired results based on your requirement. If you have a pre-decided investment amount, the calculator will calculate your final corpus, while if your goal amount is pre-decided, the calculator will calculate your investment amount. -
Can I account for existing investments in goal SIP planning?
Yes, if you already have some money invested somewhere, you do not need to save the entire amount again through a new SIP. First, estimate how much your existing investment will grow by the time you need the money. Then, subtract this amount from your inflation-adjusted financial goal and enter the remaining amount into the SIP calculator. This helps you determine the monthly SIP required to achieve only the portion of the goal that is still unfunded. -
Are the results provided by a goal-based SIP calculator reliable?
Yes, the results provided by a goal-based SIP calculator are reliable for planning your future goals; however, it is important to note that the rate of return does not remain constant and changes as per market performance. Thus, a goal-based SIP calculator can be used for financial planning, but the numbers provided by it are not absolute.
