Benefits of using SIP Calculator

In mutual funds, there are two different ways to invest your hard earned money. Investors can go the old-school way and make a lumpsum investment right at the beginning of the investment cycle. Such investors have a good chance of buying more units at the scheme’s current NAV (Net Asset Value). However, if one is making a lumpsum investment in equity mutual funds, they are exposing their entire investment sum to market upheavals. The second way to invest in mutual funds is through a Systematic Investment Plan. Systematic Investment Plan or SIP is a simple and effective way to save and invest a fixed sum regularly in mutual funds. A lot of young investors consider SIP over lumpsum because some funds allow them to start their investments with a monthly SIP sum of Rs. 500, even lower in other cases.

Investors who have long term financial goals generally consider mutual fund SIP investment as they are known to offer several benefits in the long run. But before you start a mutual fund SIP there are certain things that you must be aware of, like how much you must invest in order to get closer to your financial goal or in how many years the SIP gives you the expected returns if you invest regularly.

To figure this out, you can use an online SIP calculator. The best part about using a SIP calculator is that it computes desired results in split seconds.

Here are a few benefits of using SIP calculator:

The SIP calculator produces accurate results

When you are investing in mutual funds, you are taking calculated risks. It is essential to depend on a tool that can help one plan their SIP investments properly. This is where the online SIP calculator comes in as it produces accurate results. All you have to do is put in a few simple details like the overall corpus that you want to accumulate, your investment horizon, and the mutual fund scheme’s expected rate of returns. Within no time the calculator will show how much you need to invest monthly via SIP to achieve the financial goal. The SIP calculator is backed by a foolproof formula hence it cannot produce inaccurate results.

A time saving tool

Apart from the fact that it produces precise results; the SIP calculator is pretty fast as well. The calculations that it does in few seconds, if humans try to do the same calculations it will take time. This makes the SIP calculator a time saving tool as it computes data and delivers results like total investment sum, maturity amount, and total SIP returns (investment sum + maturity amount) in a jiffy.

Allows investors to make an informed investment decision

Since the SIP calculator is so fast in delivering accurate results, investors can forecast their SIP investments and plan better by computing different results. For example, if the SIP calculator can show how much you can earn by investing Rs. 10,000, Rs. 12,000, Rs. 15,000 and Rs. 20,000 for a certain period of time in a scheme that is expected to give certain returns. You can even change the time horizon or expected rate of returns and still get different outcomes pretty fast. So, depending on how much corpus you want to accumulate you can decide how much to invest.

Investing in mutual funds via SIP is a good option as it mitigates the overall investment risk and allows investors to earn better returns. However, mutual funds do not guarantee returns and hence one should invest as per their risk appetite.