A Systematic Investment Plan (SIP) is an investment strategy wherein you can invest small sums in an investment vehicle of your choice periodically, at regular intervals. It is most commonly used to invest in mutual funds. So, if you want to include equity funds, debt funds or hybrid funds in your portfolio, but do not have a lump sum amount to invest at the moment, you can choose to start an SIP.

Before you do this, however, you need to have an investment plan in place. And an SIP calculator can help you with this.

What is an SIP calculator?

An SIP calculator, also known as an SIP returns calculator, is an online tool that shows you the returns that you can expect to receive from your investments. To compute the returns with this tool, you need to enter different parameters such as the following:

• The amount of funds you plan to invest regularly via the SIP
• The tenure of investment
• The rate of returns expected from your investment

Once you submit these details, the SIP calculator shows you the amount of returns that you can earn from the said investment.

5 reasons to use an SIP calculator 

Using an SIP returns calculator gives you many advantages. Check out the top 5 reasons to use this online tool to plan your investments better.

1. Simple and easy to use

An SIP calculator is simple and easy to use. Beginners will also find it very user-friendly, because the tool only requires a few simple parameters to be submitted. Even if you are using this kind of a calculator for the first time, you will be able to navigate the steps quite easily, without any hassle. This makes SIP returns calculators essential financial planning tools for investors at different stages of the investment journey.

2. Free of cost

Different investment planning services available online may carry a price tag. But an SIP returns calculator is available online free of cost. You can find it on different websites, all offered without any charges. This essentially means that you can plan your mutual fund investments accurately without having to spend any money upfront. You can also access this online tool from anywhere at any time, as long as you have a smart device and internet connection.

3. Supports multiple iterations 

You can make use of an SIP calculator multiple times without any worry or hassle. There is no limit on the number of times you can use the online tool. So, you can use it as many times as you need to in order to create a foolproof investment plan. 

4. Facilitates comparison of mutual funds

Since there are no caps on the number of times you can use the SIP returns calculator, it is possible to compare different mutual funds to identify the ones that give you the optimum returns over time. By altering the SIP amount, the tenure and/or the rate, you can see how the results vary and plan your investments accordingly.

5. Makes it easier to achieve your financial goals

Some financial goals have a shorter horizon, while others are long-term targets. Also, you may have a finite amount in mind for some goals, like a home loan down payment. With an SIP returns calculator, you can determine the SIP amount or the right tenure needed to achieve the different financial goals on your list. 

Conclusion

If you are planning to invest in mutual funds or in any other investment vehicle using a Systematic Investment Plan (SIP), make sure you use an SIP returns calculator to plan your investment better. Also, to invest in the equity market directly or via mutual funds, you need to have a demat account. In case you do not have one yet, visit the Motilal Oswal website to open a demat account and a trading account through a simple and hassle-free process right away. 

 

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