Plan your financial future with a SIP calculator
If you want to save yourself from the financial disasters that come with adulthood, financial planning is essential. An important part of financial planning is wealth creation, where investment plays an immense role. Indeed, your base salary would most likely be insufficient to reach your savings goals. You would need another source of income; if not that, a way to create wealth.
All the reasons why the SIP or Systematic Investment Plan is becoming popular with young investors.
If you are reading this article, you probably know what is sip. So let’s jump
what you already know and focus on what you need to know about – ASIP Calculator.
We’ll explain everything about a SIP Calculator, including what it is, how it works, and the benefits of using it in this guide.
What is a SIPInvestment calculator? How it works?
As the name suggests, a SIP Investment Calculator is an online tool specifically designed to calculate the returns an investor will earn in a Systematic Investment Plan (SIP). Using a SIP calculator, you can calculate the absolute value of the amount you have invested after a certain period of time.
The investor is required to provide information on the rate of return, accumulated amount and term of the investment. The calculator will give you a clear estimate of how much you need to invest from your total income accrued during the investment period.
How to use a SIP calculator?
A SIP investment calculator is widely available online. So, the first step to using a SIP calculator is to select the website. Once done, you need to log in with your ID in case the website requires you to do so. The good news is that you can use the SIP Calculator for free.
Here’s how to use a SIP calculator:
Step 1: Provide relevant details. The details include the investments made on a monthly basis and the rate of return. Please note that the minimum investment on SIP is INR 500 per month. The tool calculates estimated returns based on a particular investment scheme. To deduce the possible rate of return, it is essential to calculate a figure based on the past performance of the fund.
2nd step: Once you have entered these details, you must also add the duration of the investment. The minimum duration of the SIP is 6 months. However, it is suggested that you keep investing in SIP for a longer duration to multiply your wealth faster.
You can also explore various options regarding the monthly investment amount by changing the variables in the calculator. It should be noted that the output is calculated after taking into account the possible inflation rate and capital gains tax.
Benefits of Using a SIP Calculator
- It’s simple, easy to use:
A SIP calculator has a simple and easy to use interface. You just need to enter a few details and the calculator will give you the results.
2. Save time:
Calculating returns manually through a systematic investment plan can be time-consuming, as it requires a lot of complex calculations. With a SIP calculator, you can calculate yields in a jiffy.
3. Error Free:
A SIP calculator is an online tool; this means that it will give you accurate results that are free from errors and miscalculations. Although it is possible to calculate returns manually, this will be subject to human error. That’s why it’s better to use a SIP investment calculator instead of going old-fashioned and making your job complex.
4. Helps your financial planning:
Financial planning is essential when your goal is to create a strong financial position in the future. You can use a SIP calculator to estimate your returns on investment in SIP. You can keep an estimate of how much you should invest to reach your savings goals. You can also determine if the returns are as high as you expected.
Finally, some tips you can use to start investing in SIP
Now that you know how to use a SIP calculator, you can use it to calculate your returns. That said, here are some tips you can use to start investing in SIP.