SIP calculator is an app which helps you to compute return on your SIP. Let’s try to understand how to use it.
- Use the slider below Monthly Investment Amount title and set amount which you want to invest per month.
- Use the slider below Tenor(In Years) title and set tenor for the years you want to invest.
- Use the slider below Expected Rate of Return title and set rate of return your are expecting
- Use the slider below Step up Annually title and set step up amount in your SIP.
After entering all field, you will get outcome as per under.
Box of Total Investment shows the amount which will be invested by you during the total time period.
Box of Maturity Amount shows your maturity amount which is Total investment amount + Earning on your investment.
Box of Earning Amount shows the amount earned on your investment during the period.
SIP calculator calculates SIP according to compound interest.
Below are some frequently asked question on SIP.
How to invest in SIP?
You can invest in SIP monthly. You can submit pre-dated cheques or authorize your bank account for auto debit of SIP amount per month.
SIP is safer than lump sum investment.
Any investment market, may be it equity market, debt market or money market is generally volatile. Mutual Funds also invest in these markets. So lump sum investment has risk of loss. But to invest in SIP is always prudence act. You invest per month in SIP without timing markets. So if the markets are high, you buy fewer units of mutual funds but if the markets are low, you buy more units of mutual funds for the same amount. SIP helps you to control volatility.
SIP and investment period
The short term investment in SIP may bring you higher return but it comes with added higher risk. To get steady and higher return on SIP with low risk, you should invest in SIP for 5 year or more. The longer the time period, the lower the risk will be and higher the return will be.
Three fundamental benefits of investing in SIP
- To invest in SIP, you will need no knowledge, research or technical study of financial markets. You only have to choose automated SIP, nothing else. Thus, investment in SIP is very easy.
- The amount of investment is constant in SIP without any concern of market trend. So the ecerage cost of investment will be lower.
- You should never take time off from your schedule to monitor market trends or your investment. You can monitor your investment at any time and at anywhere only by logging in to your profile in the Mutual funds.