5 Reasons Why Every Investor Should Use a SIP Return Calculator Before Starting a SIP
Posted: Dec 06, 2018
SIP or Systematic Investment Plan is one of the easiest and most affordable ways to start your investment journey at an early age. It allows you to start investing with as little as INR. 500 in the fund of your choice. But while starting a SIP is easy, making sure that your investment actually helps you to achieve your objective is not.
To make things easier, there are now return calculators for your SIP investments. All that you have to do is enter the SIP amount, SIP duration, and expected returns to calculate the maturity amount easily. If you're planning to start a SIP, these are five reasons why you should first use a returns calculator-
1. Fix the Right SIP Amount
To achieve your investment objective, it is vital that you select the right SIP amount. It is only by investing the right amount on a regular basis that you can achieve your financial goals.
As the online calculator helps you calculate the maturity amount of your SIP, you can keep adjusting the SIP amount until the maturity amount is in line with what you’ll need to achieve your objectives.
2. Know How Long You Need to Continue Investing
Apart from the SIP amount, the SIP duration is vital too. Just like the amount, you can make changes to the SIP duration while keeping the SIP amount and expected returns fixed to know the term for which you need to continue your SIP.
Depending on your objective and returns expectation, the SIP duration can be a few years to even ten years or more.
3. Select the Right Type of Mutual Fund
While the calculator might not allow you to pick a particular mutual fund scheme, it can at least help you select the right type of fund in which you should invest. Once you’ve entered the SIP amount you can afford and the duration for which you’d like to continue your SIP, you can then enter the returns you expect from your SIP.
The range of returns varies significantly based on the type of mutual fund you select. For instance, if a particular kind of fund generally delivers returns in the range of 7% and you've already fixed the SIP amount or SIP duration, you'll have to select a type of fund that offers higher returns if the 7% returns fail to reach the maturity amount you'll need.
4. Invest in Multiple Mutual Fund Schemes
Even if you’re planning to invest in multiple schemes, the online returns calculator can be very helpful. You can use the calculator for different funds on the basis of their expected returns and the SIP amount you can afford.
This will make it easier for you to create an investment strategy that’ll help you achieve your objectives.
5. Transparent Objective Planning
It is only with the help of proper planning that you could meet your investment objectives. By allowing you to know the expected maturity amount, the SIP return calculator adds a considerable amount of transparency to your target planning.
On the basis of the results, you can then increase or decrease your SIP amount, select the right mutual fund, and diversify to other asset types if required.
Use the Calculator to Experience These Benefits
Returns calculator for SIP is an easy-to-use online tool that makes you a confident investor. Use it before starting a SIP to have a clear idea of what your investment could generate in future.
Based on the results, you can then work on your investment strategy to ensure that you’re able to achieve all your financial goals in a safe, realistic, and timely manner.
If you are planning for a long-term financial goal, a mutual fund Sip that suits your objectives and your surety of getting exceptional results can be an excellent option.