When it comes to mutual fund investments, you, as a responsible investor, need a tool that can accurately calculate returns on your investments so that you can make informed decisions and generate higher returns. This is where a Systematic Investment Plan (SIP) calculator comes in handy.
By using an SIP calculator, you can estimate the amount you need to set aside regularly (weekly, monthly, or quarterly) to achieve a specific goal in the expected timeframe. Let’s take a look at some crucial features and benefits of an SIP calculator that explain why every investor must use this online tool before they invest in SIP mutual funds.
- Makes goal-based investing easier
An SIP calculator makes goal-based investing easy, such as for retirement and children’s higher education. For instance, if you want to save for your child’s higher education which is 18 years away, the calculator will help you calculate the right SIP amount needed to reach that goal, taking into account factors such as the investment amount, total time period, and expected rate of return.
- User-friendly and free to use
An SIP calculator is user-friendly and easy to use. You can simply input your basic data and get accurate results. Moreover, SIP calculators are available for free on various websites online, and there is no limit on the number of times you can use the tool. So, you can compare different SIP plans with different amounts, tenure, and expected return rates to create a fool proof SIP investment plan.
- Precise and quick estimates
An SIP calculator will help you estimate your returns quickly and precisely without the need to calculate them manually. The calculator generates estimates using three different growth scenarios like average, above-average, and below-average returns. Also, most calculators show graphical and tabular representations of your SIP return estimations, giving you a clear picture of your total investment as well as the earnings you can earn from it. Once you know your estimated SIP earnings, you can allocate money to other investments and balance your savings.
How can an SIP calculator help you plan your future goals strategically?
Let’s say Mr Sahil wants to start a monthly SIP of Rs 5,000 for 10 years in a mutual fund scheme with an expected rate of return of 12%. He will enter his monthly investment amount, investment tenure, and estimated returns in the SIP calculator. Based on these details, the calculator will display the following result showing how much his total investment and estimated maturity value would be at the end of 10 years.
Monthly investment – Rs 5,000
Investment tenure – 10 years
Estimated returns – 12% p.a.
Total invested amount – Rs 6,00,000
Estimated maturity value – Rs 11,61,695
So, the total value at SIP maturity that Mr Sahil will receive after 10 years is Rs 11,61,695.
With numerous benefits and useful features, an SIP calculator has made it easier for investors to make the most out of their SIP investments. The calculator lets you create an investment strategy beforehand, thus helping you find the best SIP investment plan and achieve your financial goal in due time.