How Can a SIP Calculator Help You in 2022?
Do you want to invest in mutual funds but don’t know where to begin? Want to know more about SIP, market trends, and the best way to calculate your SIP? Do you want to learn how to use a mutual fund SIP calculator and how it could benefit you in 2022?
Well, this is the article you need to get your doubts cleared. In this article, you will learn about SIP, how it works, and what its pros are. You will also know why you should use a SIP calculator online instead of using a manual option.
What is SIP and why should you use it?
SIP, also called Systematic Investment Plan, is a popular way of investing in mutual funds. It is an easy way to invest a fixed amount of money at regular intervals and get a good profit. Some people think SIP is a different investment scheme from mutual funds, but in reality, it is a plan to invest in mutual funds.
It helps you develop discipline in monetary matters and grows your wealth over time. To know how much you will be gaining from mutual funds by using SIP, you should use a mutual fund SIP calculator. You should follow this path because it allows you to enter the stock market world without entering the high-risk zone.
Here are some reasons why you should start looking for SIP:
- Monetary discipline
SIP instills monetary discipline in you, thus preventing you from making bad financial choices. It forces you to make wise choices with the money you have and curbs your extra expenses.
- Decreases the level of risk
It decreases the amount of risk while investing as it is properly structured as per market trends. Now, you can invest in mutual funds without worrying about any sort of risk.
- High flexibility
You can increase or even decrease the amount of money you invest without worrying much about it. This helps you maintain flexibility in your investments and keeps you hassle-free.
- Experiencing a compounding effect
You begin to know the true power of the compounding effect. Suppose, you invest Rs 500 every month for 20 years, you will have Rs. 3.82 lakhs at the end of the 20 years, and this is the compounding effect.
- Helps in planning
Once you know how the market works and how you can bring about significant change through small investments, you can plan your future investments accordingly. This gives you a vision of how much you should expect while investing. To better plan your investments, you should use a SIP calculator online to calculate your mutual fund returns.
What is a SIP calculator?
A SIP calculator is a tool that helps you calculate your returns from your mutual fund investments. A SIP calculator online also helps you get a clear picture of how much return you should expect after investing a particular amount of money for a fixed period of time.
Investment experts suggest that one should keep using a mutual fund SIP calculator now and then. This will help the person keep up with investment updates and market trends.
How to use a SIP calculator?
A SIP calculator uses a standard formula:
F=P x {[(1 + r)n – 1] ÷ r} x (1 + r)
Where F is the money you will be getting at the end of your maturity period, P is your principal money, which you invest through the SIP, r stands for your compounded rate of return, and n is your number of years.
For instance, if you invest Rs 8,000 every month at an interest rate of 10 percent for the next 10 years, then your total money will be around Rs 16,52,416 using the above formula.
To use a SIP calculator online, you need to follow some simple steps:
- First, enter the weekly or monthly investment amount in the requisite bar.
- Now, enter the interest rate in the SIP calculator online, that you will be getting from the funds.
- Enter the number of years/months for which you should be investing your money.
- Click on “Calculate”, and you will have your mutual fund return amount right in front of your screen.
Why should you use a SIP calculator?
You can plan your investment more effectively now because you can try different investment amounts and interest rates. You can estimate the correct values of the returns on your investment, ensuring better outcomes.
Using a SIP calculator online is a very time-saving option as you get the results in less than a second. It is very handy, effective, easy to use, and user-friendly, which means you won’t have to worry about anything while calculating your mutual fund returns.
The results that a mutual fund SIP calculator shows you are 100 percent accurate as it is generated by an AI.
Conclusion
A SIP system improves the quality of your investment and increases your rate of return. It saves time and money for you by incorporating financial discipline. A mutual fund SIP calculator gives you all types of scenarios with your investment options and helps you estimate your interest.
Are you looking forward to reading such articles and gaining more knowledge about SIPs, mutual funds, personal loans, and other investment portfolios? Then, you should check out Piramal Finance, which has a lot of content and services about all of these topics.