Various investors may not be fully aware that SIP (Systematic Investment Plan) and mutual funds are not identical, and both terms signify different meanings, intents, and results. However, it is important to understand that the SIP is merely a method of investing an amount in mutual funds, ULIP (Unit Linked Insurance Plan), and other financial sources. SIP is regarded as a process of investing funds in the money market at a regular or stipulated interval in order to accumulate a significant corpus over the long run.Read more
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In addition, SIP is a route to enter the mutual fund market in order to invest funds and generate considerable returns. Hence, an investor may make an investment by availing of SIP.
An Index fund SIP calculator is an online tool that can calculate the returns on investment. The investor may get a fair idea of the returns and investments using the SIP calculator index fund. The actual rate of returns on mutual funds varies from fund to fund due to several factors. However, based on the previous year's result, an investor may get an average rate of return and calculate the total returns accordingly. The SIP index fund calculator gives a clear idea to the investor about the performance of a scheme based on an offered rate of interest. In addition, an investor may draw several comparisons among different SIP funds using the SIP index fund calculator.
Instead of paying a lump sum amount, an investor may allocate a premium on a regular interval. It offers a double rate of return compared to traditional methods. The index fund SIP calculator shows the power of compounding by generating more returns on premium amounts. Here are some benefits that an investor may enjoy using an index fund SIP calculator.
An investor using an index fund SIP calculator may determine the amount required to invest to accumulate the desired corpus.
By entering the expected interest rate and premium amount, an individual may decide the time period he is required to stay invested with the SIP plan.
It is straightforward to use the index fund SIP calculator. An investor may quickly calculate the returns by visiting the SIP calculator website.
It is easy to use the index fund SIP calculator. One needs to follow the steps listed below in order to calculate the SIP returns.
In the first step, the investor needs to enter the amount he wishes to allocate on a monthly basis.
In the second step, the user is required to select the expected rate of return on the investment. The interest rate is calculated on an annual basis that varies from 9 to 18 percent and may even escalate to 30 percent. Hence, an investor considering the market risk may take 12 percent as an average rate of interest.
The time period varies from one year to 40 years. According to the desired goal, an investor may enter the duration or time period. However, it is advisable for a young investor falling under the age group of 20-25 to stay invested for at least 30 years in order to accumulate significant wealth for retirement. Nevertheless, the investment should be made based on goals, so the duration is also subject to be decided accordingly.
Upon entering the aforementioned details, an investor is likely to get the results of the total amount he invested plus the interest he generated over the years.
Let us understand it with an example.
If an investor is willing to save INR 10,000 per month, he may invest it in SIP and calculate the returns using the SIP index fund calculator.
If an investor invests INR 10,000 per month for a period of 10 years by assuming 12 percent as an average rate of interest, he is likely to accumulate INR 46,46,782 at the end of the tenth year. Therefore, the total amount he paid during the ten years will be estimated as INR 24,00,000. At the same time, the total interest he earns from the SIP plan will be evaluated as INR 22,46,782.
Let us see more examples in the table given below.
|Premium Amount (INR)||Expected Rate of Returns (%)||Duration (Years)||Total Value (INR)|
The index fund SIP calculator is a helpful tool to calculate the returns one may get in a long-run investment. In addition, it helps the investor in order to make comparisons among different SIP plans. On the basis of the previous year's performance of a scheme, an investor may conclude the rate of interest and determine the returns using an index fund SIP calculator.
*All savings are provided by the insurer as per the IRDAI approved
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
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^10(10D) Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.
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