A step-by-step guide to use an online SIP calculator to check investment plans
Systematic Investment Plans (SIPs) are a popular investment tool among investors to create wealth over time with small and regular contributions. Although an SIP is a relatively simple concept, it’s important to have a clear understanding of your investment plans to calculate how much you need to invest regularly to reach your goal. Here, using an online SIP calculator can be helpful as it helps you make the most out of your SIP investment.
The purpose of using an SIP calculator is to estimate the maturity amount and the expected return on investment for different investment plans. With just a few clicks, the tool gives you a fair idea of how your investment will grow over time. This helps investors choose the right plan based on their risk appetite and financial goals.
Using an SIP calculator online
There are many trusted online platforms offering SIP calculators to help investors with their investments. Simply open the calculator and enter a few details in the given sections.
- Monthly investment amount (Rs 500, Rs 1,000, Rs 10,000, etc.)
- Investment years (5 years, 10 years, 15 years, etc.)
- Expected rate of return (8%, 10%, 12%, etc.)
- Click on ‘calculate’
With these inputs, the online SIP calculator will generate a report showing the total principal amount invested by you, the total maturity value, and the returns earned on it.
Checking different investment plans with the SIP calculator
With an online SIP calculator, you can experiment with different scenarios to see how they would affect your monthly investment requirement. You can input different expected return rates or time horizons to see how it would impact the amount you need to invest in SIPs. This feature is especially helpful if you are trying to figure out which SIP mutual fund plan best fits your financial needs.
For example, suppose you want to invest Rs 10,000 per month for 10 years in three different schemes – scheme A, scheme B and scheme C, which have estimated returns of 12%, 10%, and 8%, respectively. Simply enter these details one by one in the calculator and the results obtained from using the tool will be as follows:
Scheme A – Total corpus = Approx. Rs 23.2 lakhs with 12 % p.a.
Scheme B – Total corpus = Approx. Rs 20.6 lakhs with 10 % p.a.
Scheme C – Total corpus = Approx. Rs 18.4 lakhs with 8 % p.a.
Based on the results, you can select the best SIP investment plan that has the potential to give you the highest returns.
Why experts recommend using an SIP calculator to check investment plans
- It’s free of cost. You can examine different return scenarios and make a smart investment decision.
- You can estimate near to accurate future value of your investment within seconds, thus saving time and manual effort.
- You can decide on the monthly instalments depending on your goal, target amount, and chosen time period.
- You can calculate how much corpus you would need to generate in order to reach your specific financial goal, such as child’s education, retirement, wedding, etc.
Investing for the future doesn’t have to be guesswork. Tools like SIP calculators can help take some of the uncertainty out of your investment-related decisions, thus, giving you a clear roadmap for financial success.
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