A SIP Calculator is a digital financial online tool which helps investors to invest their funds and their returns within a specific time. In the era of the global village, digitalisation plays an important role in the race of life where time is a key factor in all fields of life and several tools are used to regularise the life routine, where main purpose is to utilize the savings of someone amount with precise and quick accountancy, Mututal Fund (MF) Calculator is used in modern era. An investor needs to fix rupees over different periods of time with consistent investment to gain more amount with an accurate calculation in the sense of accountancy and returns over a specific period in a Systematic Investment Plan. The investment amount, frequency, expected annual run rate and tenure are checked on the Mututal Fund Calculator in no time. Entering the values of your own will and power, an investor can calculate the returns achieved. It is a goal-based planning, like saving for old age, children's education, buying a home and future business planning, and investors are able to estimate their investment growth over time, which is realistic and informative expectations rather than depending on guesswork. The complexity of manual calculations is abolished by the use of this online tool. Systematic Investment Plan Calculator helps both beginners and old investors to plan ahead and serves in the financial journey to achieve long-lasting wealth generation in a systematic and tension-free manner.
Functions of SIP Calculator
The Compound Interest Formula is applied to a series of regular, fixed investments for a selected time. SIP Calculator calculate each instalment depending on varying time from the investment date instead of one accountancy return. A different length of time is usually entered in the Mututal Fund Calculator
1. Monthly investment amount
Fixation of the amount for each month
2. Investment Period
Total term of the Systematic Investment Plan in months or years
3. Expected Annual Return Rate
Mutual Fund or Investment Scheme estimated rate of return/year
Future value of a series formula is used by the calculator
FV = P [(1+r)^n -1 ] * (1+r)/r
As
FV = Future Value (total amount at maturity)
P = Monthly Investment Amount
r = Monthly Return Rate(Annual Return Rate/12)
n = Total Number of Months Invested
Key Notes About The Formula
There are three major points about the formula as given below:,
- Monthly compound is usually assumed by the SIP.
- For estimation purposes, it assumes a fixed return rate.
- Beginning of the month is the best time for investment, and it is assumed by most of the SIP calculators. That's why the last deposit earns interest for once, as described in Extra (1+r) at the end.
Advantages of the SIP Calculator
Financial Planning
It can help you in financial planning because your's idea of investment and return in the specific period that you planned. It will help you to plan your monthly budget.
Comparison and Assessment of SIPs
Various SIP investment strategies are compared and assessed in the Systematic Investment Plan according to your plan of final amount, total invested money and expected return in the MF Calculator.
Free to access
The online calculator is totally free to use and easily accessible from any place in the world where internet facility is available, and enter time limit is not limited. You can use it again and again.
Results
This gives you instant and accurate results at any time when you use it.
Usage
The usage of the SIP Calculator is very easy. Your usage involves putting in details which you enter in the calculator, and seeing the results within seconds.
Systematic Investment Plans in India
India is a major country where the SIP Calculator is used for collecting wealth among the middle class, but nowadays, it has become popular all over the world, especially in third-world countries, particularly in the salaried class. The main reason of its popularity is its accuracy and precision in managing your investment for future planning of buying a home, children's education, as well as saving for world trips.
What is SIP?
This is a technique to invest money into mutual funds or stocks, which allows for investing a fixed amount at regular intervals over time instead of making a large investment at one time. SIPs offer the public without tension to invest in the market over different intervals to make wealth by the usage of small amounts to large amounts. To avoid guessing and mental depression, the Mututal Fund Calculator helps individuals to get returns on their invested amount.
Kinds of SIPs
There are many kinds of SIPs, but it is necessary for you to know about the types which one is best for you.
Regular SIPs
The most common and important type of this calculator is regular SIP, in which investors can fix an amount at regular intervals, monthly or quarterly, into a mutual fund scheme. Consistent and disciplined approaches are used in this method to build wealth because the date and amount remain constant. In this method, the market value of high or low does not affect the investment. Usually, this is beneficial for long-term aims such as retirement planning, children's education or buying a house. This technique helps with financial discipline and stability, and the investment process is without emotion.
Flexible SIP
As the name shows, this type of investment is always flexible as per your requirements. Market ups and downs are key to this method. When the market is down, you can invest more, and when the market is up, you can withdraw your amount. The financial condition of the investor is core; you can change the instalments. Short of money is the lower investment, and surplus money is the higher investment. That is why it is called Flex SIP.
Set Up SIP
This type of Mututal Fund needs some values to enter a few key details to estimate future investment value. First of all, you have to enter the monthly investment amount to set for each month and next you put your tenure for the SIP. Furthermore, the expected annual rate of return is provided by your past experience. After putting all the values in, you would be able to compute the future values of the investment. This method helps you to understand the process realistically, achievable goals, impacts of invested amount in different periods, amounts and rates of return in wealth wealth-building journey.
Perpetual SIP
Time is key in this method; you have to invest the amount for a predetermined period. Here, the start date is mentioned in this type, and the end date is on your own will. Investors leave the end period open-ended but only aim to leave the Mututal Fund at any time by informing the fund house or the Asset Management Company of the stoppage of SIP.
Trigger SIP
Trigger MF refers to the condition where investment is initiated, changed, and stoppage is automatically triggered based on preconditions. Indexing of the market is linked to the investment. While using the SIP Calculator for this method, put your investment amount, duration, and expected return and the trigger condition is defined. Favourable conditions of the market are beneficial for this method.
Multi SIP
Multiple funds are invested via a single SIP in the fund house. Equity funds, debt funds, balanced funds and market funds are categorised as pr kind of instruments which are invested. This is more smoother process. Each category is put separately, and risk is reduced in a single scheme. This technique helps investors to grow wealth in a single scheme.
Benefits of SIP
There are many benefits of a Systematic Investment Plan, and some main benefits are given below:
- It motivates an investor to invest a fixed amount regular interims in regular and disciplined savings.
- Low and high prices of the market benefit you while investing.
- Financial planning and easy to invest in
- Results are obtained within seconds for the investors.
- This is time-saving and risk-free.
- A long-term systematic investment plan helps to achieve goals by targeting the goals through adjusting variables.
- It encourages the investors to make informed decisions.
- Long-term SIP returns are significant for buying a home, retirement plan and children's education.
- With the help of this calculator, investors can invest according to their expectations.
- Graphical representation helps the investors to understand easily, especially for beginners.
Conclusion
From the above discussion, we can conclude that it helps investors to invest with clarity and precision for the financial journey. In this way, a disciplined and smooth investment with reduced risk is done in long, short and flexible terms. It is the best online financial tool and gives guidelines to both beginners and experienced investors to make informed financial decisions. In short, the SIP calculator is not only a tool but also a roadmap that helps investors to arrange their financial goals in a smart and long-term with full confidence.
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