Home/Article/To invest in a SIP, use a SIP calculator.
To invest in a SIP, use a SIP calculator.
05 Jan 2023

In order to use a SIP calculator to help you to make informed investment decisions, you should know what a SIP or a systematic investment plan is. Before going into that, you should note that online electronic calculators facilitate the easy and convenient calculation of returns on almost any investment product you choose. 

A Brief Explanation on SIP

Mutual funds are popular ways to invest today, offering you less risk than direct equity investments. They are also a good way to achieve portfolio diversification. Moreover, they are managed by fund managers who do all the decision making for you, trying to ensure the best possible returns through the fund you have invested in. Mutual fund investments require investors to make a lump sum investment while investing in assets of a particular fund. 

A SIP is just a mode of investing in a mutual fund, by investing small amounts of your capital rather than lump sums. You can start your SIP investment with funds as low as Rs. 100 in some funds. Before you go ahead and make investments, you can use an online SIP calculator to determine your potential returns on a SIP investment. This way, you know how much to invest. 

What is a SIP Calculator?

A SIP calculator is a systematic investment plan calculator. It is a simple electronic online tool, available with most financial portals and brokerages, to help investors to compute returns on a mutual fund investment made through a systematic investment plan. The SIP return calculator is a popular tool used by the majority of SIP investors today, mainly millennials who plan their investments with care. In fact, more than the hassle of having to open a demat account and invest in the risky markets today, many investors prefer a SIP, and use calculators with ease. 

A SIP calculator is designed in such a way so as to give investors some estimate of returns on investments. Nonetheless, the actual returns on any investment that is based on market-linked securities are open to shifts and fluctuations of the markets. Hence, the SIP return calculator has no way to gauge any expense ratio or exit load information. The calculator will, however, compute any gain in wealth and expected returns on a SIP investment according to any plan, monthly, quarterly, or for any periods you have chosen. The estimates that a SIP calculator generates are based on projected yearly rates of return. 

According to experts in the mutual fund segment, SIPs are a lucrative way to park your money, and also offer you a method to become disciplined where your finances are concerned. Saving regularly and investing in a SIP gets you into the habit of regular fund allocation. A SIP return calculator assists you in the following ways:

  • Aids investors in making decisions about amounts they should invest
  • Informs investors about amounts invested
  • Provides an estimation of returns according to projected rates of return based on past data of any given funds

A SIP is a great way to diversify your portfolio, along with any other investments like an upcoming IPO, direct equity and fixed income instruments. 

Online Calculators to Guide Investment

While you may open a demat account to invest in the share or commodity markets, you can also invest in a SIP to mitigate your risk. Using a SIP calculator, you can effectively gauge your maturity amount by feeding in information about your regular investment amounts, the rate of interest and the number of payments to be made to achieve returns. For real portfolio diversification, you may think of an upcoming IPO subscription after you do some homework too. 

Related Articles: Investing in Mutual Funds is Now Easy with MO Investor App | Invest In Mutual Funds Online In 5 Simple Steps |  How to Analyse Mutual Funds for Big Returns | Tax Benefits of Investing in Mutual Funds | Mutual Fund - Need of Financial Plan | Upcoming IPO 

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