When considering investments, one of the best ways to maximise your returns is to invest in mutual funds. Undoubtedly, the risk factor in mutual funds is slightly higher than other forms of long-term investments like FDs or RDs; however, such investments offer lucrative returns and a variety of choices in both long-term and short-term investments.
SIPs or Systematic Investment Plans are highly preferred by investors who prefer strategize investment schemes of monthly investments rather than lump sum investments.
In this regard, mutual Fund SIP calculators come in handy that help you ascertain the long-term returns on SIP investments.
In this post, we will explore how to use this digital tool and its benefits in the long run.
How to Use a SIP Calculator?
When you decide to invest a certain amount every month, it is essential to find out the estimated returns you can earn from them, no matter whether you go for mutual funds, SIPs, or IPO investments. This helps you plan your financial standing and fulfil your long-term objectives by estimating such returns.
Here is a step-by-step procedure on how you can use SIP calculators:
Step 1 – Visit the website of a mutual fund or your broker and find the SIP calculator.
Step 2 – Enter the monthly investment amount you would like to invest and the time period for which you want to invest. Next, enter the expected interest rate. The interest amount is compounded, which assures a high value of returns.
Step 3 – Once you enter the details, you will have an estimated return amount and the total invested amount instantly.
For example, if you enter Rs. 1000 to be invested for a period of 15 years at an interest rate of 10%, then the values you get from the SIP calculator are:
· Invested Amount – Rs. 1,80,000
· Estimated Returns – Rs. 2,37,924
· Total Value – Rs. 4,17,924
Why Should You Use a SIP Calculator?
Here are some of the primary reasons to consider using a SIP calculator:
It is a Free Online Tool that is Available 24/7
SIP calculators are absolutely free and are available. Nowadays, almost every mutual fund platform and stock brokers offer a SIP calculator on their website. Thus, getting access to this digital tool that gives you error-free estimated returns on your SIP savings within seconds is quite easy and convenient. It wil gives you an estimated value of your IPO investments instantly.
It Helps You Plan a Financial Corpus
You can plan your long-term financial goals using a SIP calculator. This tool helps you estimate the desired amount and the target amount that you want to achieve from SIP. Such investments help you fulfil long-term goals like retirement goals, education or wedding of children, etc.
You Can Use Variations
Until you don’t achieve the desired retirement or long-term goal amount, as the SIP calculator estimates, you can use various permutations and combinations with different tenures or investment amounts. This tool is extremely beneficial for risk-aversive and cautious investors looking for an ideal return value on their SIP investments and IPO investments.
User-friendly Interface
The best part about using a SIP calculator is that you don’t have to be a professional investor or an expert in mutual funds to analyse how much you should invest and how to invest.
Another key benefit of using SIP calculators is that you don’t need to interact with agents or middlemen to start a SIP or calculate your returns – this makes it a feasible option for beginners and experienced investors.
Conclusion
Using a SIP calculator can be pretty beneficial, especially if you are interested in investing in mutual funds. SIPs are also a way to counter the risks associated with mutual funds, as these investments cover the positive and negative fluctuations and volatility of the fund and accordingly generate wealth.
Disclaimer – Information provided in this blog is for general informational purposes only, not financial advice. Investing carries risks, and past performance doesn’t guarantee future results.
