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September 21, 2023

How Can You Get the Most Out of the SIP Calculator?

One of the most preferred investment options amongst middle-class professionals in India is mutual funds. These schemes are known for coming with the potential of generating long-term wealth for the future. There are two investment modes when it comes to mutual fund schemes. A mode of investment can be defined as the method in which you opt to invest in the mutual fund scheme you signed up for. For allocating funds to mutual funds, there are two modes of investment. One mode is referred to as a lump-sum investment. Under lump-sum investments, an investor investing in a mutual fund scheme is required to make a one-time payment regardless of whether you have the money at your disposal or not.

The other mode of investment is a systematic investment plan or SIP. Under these plans, you can opt to invest in your mutual fund scheme at regular intervals. A common example of intervals for SIP payments is monthly payments. Unlike the lump-sum mode, people from the middle class prefer to invest in mutual fund schemes through the SIP mode. That’s because this mode is not a burden on their wallet. On the other hand, the lump-sum mode can be pretty taxing. All that you require for the SIP mode is for you to have the required investment amount in your mind. If you don’t know, you could use a SIP calculator.

What are SIP calculators?

Systematic investment plan calculators are a type of calculator that can be easily accessed through the internet. By using this calculator, you can learn how much of your monthly income should be kept aside every month. Apart from learning that, you could also determine how much wealth you would probably end up accumulating at the end of your investment journey after reaching retirement age.

How do these calculators work?

These calculators are known for offering a numerical analysis of your SIP. This calculator can be used as a tool that helps you in determining the returns you might end up earning by parking your funds in a mutual fund scheme. These calculators provide you with an estimate of the returns that you could probably enjoy for your mutual fund investments made through the SIP route.

Also, this calculator is known for providing investment estimates at two levels. One of the uses is that it can let you know how much your investments will grow over time. On the other hand, the calculator also provides insight into how much you need to invest to reach your financial goal. But the actual returns offered by a mutual fund scheme are known for being reliant on various factors such as market conditions. Hence, you must keep in mind that the numbers provided by these calculators should not be taken as absolute. But despite that, there are some advantages associated with these calculators. Some of the common benefits associated with SIP calculators are:

  • They are known for giving an idea about your investment journey:

As stated before, these online calculators can provide insight into how much you might accumulate by investing a certain sum. However, apart from that use, this calculator also makes it easier for you to ascertain the required investment amount you need to set aside every month to reach your financial goals.

  • They provide answers in no time:

Calculating manually in general takes time. The same is applicable while calculating your investment journey manually too. However, thanks to this online tool, you can get answers in a matter of seconds.

  • The calculators are easily accessible and free to use:

A SIP calculator has another salient feature. The said feature is that you can find it very easily. All that’s needed is to open the web browser and search for a SIP calculator. Moreover, you could use it multiple times free of cost. So, you tinker with different combinations with these calculators.

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