Ways To Use Online SIP Calculator for Mutual Fund Investments
SIP Calculators online help us determine what would the value of our investments will be in the future. These are merely a method of investing in mutual funds. These tools will help you determine your returns that you can avail. It is basically a process of investing a fixed amount of money in a mutual fund at regular intervals. In liquid funds although there is liquidity of the amount and it is not necessary for it to be fixed.
These sip calculators online have been designed to help the investors find an estimated amount of returns that they can expect while making an investment. The calculator will calculate your wealth gains and expected returns on a monthly, weekly, quarterly basis. SIP Online calculators allow you to make investments on a weekly, monthly or quarterly basis. It is very efficient and helps one to save a lot of their time. It helps one become more financially disciplined.
How to use an Online SIP Calculator?
A SIP online calculator works a formula. In this formula there are various terms that signify different meanings. Some of these terms are amount received upon maturity, amount you invest in regular intervals (however it is suited to one), the total number of payments that you have made, rate of interest periodically.
There are different types of these calculators. Some of them are the lump sum sip calculator and the monthly sip calculator. The initial calculator helps you to determine the value of your investment in a lump sum made at once. The latter one, is for those who make investments on intervals. It considers the monthly/weekly/quarterly investments into account while calculating the future value of the investment. The latter is widely used as many people prefer investing fixed amounts in intervals.
There are a few steps to calculate using sip calculators:
- Firstly, input investment details, which are very important. You need to enter your investing amount, and specify the expected return rate.
- Then, you have to choose the compounding frequency. Here you have to choose the frequency at which the returns will be compounded, monthly, weekly, annually, etc.
- Lastly, you will have to calculate the results. After you put all the necessary information you will be seeing the results of the estimated value of your investment. It will show the total investment amount, the maturity amount, the potential returns, during the course of the investment.
Benefits of Using an Online SIP Calculator
Incorporating an online SIP calculator into your investment strategy offers several advantages:
- Informed Decision-Making: These calculators empower you to make informed decisions about your investments, aligning them with your financial goals.
- Realistic Financial Goals: By providing projections, SIP calculators help set realistic financial goals, allowing you to track progress over time.
- Historical Data Insight: While actual returns may vary, these tools offer insights based on historical data, aiding in understanding potential outcomes.
- Portfolio Diversification: Calculators assist in diversifying your investment portfolio, spreading risk across various assets and optimizing returns.
Rather than putting your liquid money in a savings account, you can utilize it in mutual funds. These online calculators provide a lot of advantages now for you to check which investment will be suited for you. These are short term low risk options.
By using these calculators one can make uniformed decisions about their investments and set realistic financial goals. Actual returns may vary, as these calculators provide the data based on historical data that it already contains. But it gives a gist or an idea about the type of investment you want to make.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.