Thursday, September 20, 2018

How does an SIP calculator catalyzes the investment process?

by Dishika Baheti (writer), Jaipur, July 07, 2016

Credit: Dishika Baheti
SIP calculator helps you to calculate the return of your amount invested in mutual funds

An SIP return calculator is a unique tool. It is fundamentally designed to bewitch the investors towards online investing.

We all are aware of the term Systematic Investment Plan (SIP). SIP is a recurring investment. But until you know the amount you need to invest how can you be an efficient investor? One cannot randomly invest any sum of money. Also, the amount for SIP depends on the investment objective of the client. Therefore, we can say that everything is interlinked. So, firstly the initial task is to determine the investment objective. Based on the purpose, the amount and the duration of investment are decided. Reckoning of the SIP amount is a very backbreaking and composite task. If anything goes wrong in the calculation, then the whole investing process is doomed. No need to panic! The financial experts have sorted a remedy for the problem. SIP calculator is the accurate retort for the compound computations. An SIP calculator is a trustworthy tool which accelerates the process of investment by dispensing quick and easy option for calculation. With the introduction of online investing alternative, the application of SIP calculator has intensified manifolds.

The obvious question alarms our mind, how does an SIP calculator calculates the amount for SIP? The calculation of the amount of SIP is done through a method called CAGR (Compound Annual Growth Rate). The CAGR is the way of quantifying the growth of any investment over a period more than one year. An SIP calculator works on the same strategy. SIP calculator is the predominant factor which is attracting the clients to adopt the online investing mechanism. It makes the investors entirely independent regarding the investment process.

How does SIP calculator facilitate better calculations?
An SIP calculator is a tool which is tailor-made for the calculation of SIP amount over a period at a particular rate of interest. It is a well-established fact that the investors are not professionals of the financial market. Thus, even by adopting the online investment strategy, they tend to get confused and end up selecting some random amount for their SIP. Why is it so? Can this be avoided? Yes, of course! The experts have considered the hurdle of investment calculation very seriously. They have realized that only with the introduction of an online investment alternative the tautness of investment cannot be waved off. The calculation for investment is equally a typical task. Thus, an SIP calculator provides a pinpoint solution to the problem. The major benefits of SIP calculator includes the following:

  • Fewer inputs:- In an SIP calculator, the data required by the tool to work upon are very few. On an average, the primary inputs include- the amount of SIP that a client is ready to invest on a monthly basis, the tenure of investment, the desired rate of interest. Apart from these inputs, some calculators also include the commencement date and the possible maturity date. It is a variant of the tenure of investment.
  • Unambiguous results:- SIP calculator is a tool that gives accurate results repeatedly. The calculations are entirely based on the inputs the client provides to the tool. If the data is correct, then there is no chance of getting an inaccurate result. SIP calculator also produces results that are precise. There is no room for approximation.
  • Handy approach:- The tool is freely available for use. SIP calculator is a very user-friendly tool which can be used from anywhere. It is coherent to use. The insertion of the inputs can be made either by typing or by way of selecting. Thus, the overall appearance and usage of the tool provide a soothing and flexible environment for working.
  • Friendly user interface:- SIP calculator comes with a user-friendly interface (graphical user interface). It means that the clients need not type in commands for performing any calculations rather they just have to click a few buttons which make the investment decisions much easier and quick. The clients need just to enter data in the given fields, and the rest is taken care of by the mutual fund planner itself. The customers can make the best possible use of their money by efficiently planning their investments in a better way.

Types of SIP planners
There are different kinds of calculators which allow the clients according to their needs for making the investments which will not only help the customers but will also make it possible for them to invest the correct amount which would generate the required corpus for them.

  1. SIP Amount Calculator:- This type of calculator allows you to calculate the amount needed to savings or investing on a regular basis. It depicts the returns on a general basis whether a client wants to invest that money or save it. Thus, SIP amount calculator does not only allows the clients to comprehend the amount to be invested in mutual funds but they provide an idea to the customers about their monthly savings and the return they would get for a particular investment percentage.
  2. SIP Returns (CAGR) Calculator:- This type of SIP planner helps you to calculate the returns based on a fixed rate of return to the clients. This means that it is solely helpful to the customers who tend to invest in mutual funds. The rate of return once fixed cannot be changed by the clients.
  3. SIP Maturity Value Calculator:- An SIP maturity value calculator is capable of planning your investments in such a way that you are able to speculate the returns for your investments quickly which may otherwise fluctuate by large amounts through any other mutual fund planner. It means that the clients can calculate the returns over a period of time computed at different rates of return.
  4. SIP Tenure Calculator:- This member of the SIP calculator family helps the clients to spot the tenure which will be required for accumulating the required corpus on a particular rate of return. Thus, the clients are able to know exactly the amount for which they have to invest in order to attain their financial goals.

Thus, an SIP calculator has many benefits apart from easing out the calculations required while investing in the SIPs.

About the Writer

Dishika Baheti is an active hand in providing advice to mutual fund investors. She has been reading the market moods and conducting analytical researches on mutual funds market for the last three years.
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1 comments on How does an SIP calculator catalyzes the investment process?

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By deepa c on July 08, 2016 at 06:02 am

Thank you for the SIP Calculator, i was looking for it since long. Can you please tell me which

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