SIP (Systematic Investment Plan) is one of the popular saving and wealth accumulation tools in the investment market. A SIP calculator is a hassle-free tool which gives users an estimate of the maturity value of their investment. A user needs to fill in some basic details, such as the investment duration, expected interest rate and an annual percentage increase (yearly top-up) on their investment.
What Is A SIP And Its Advantages?
SIPs provide an easy way of building wealth over a period for various financial needs of investors ranging from marriage, education purposes, buying a property, among others. Under this method, a predetermined amount is invested in a mutual fund strategy of investor's choice. The investments can be made on a fixed basis, mostly monthly, or in a lump sum mode.
One can start investing with as low as Rs 500 each month and may usually get higher returns than most standard investment options. SIPs help improve financial status without the hassle of regularly tracking and analysing one’s investments. Instead, it gives investors the peace of mind to sit back and let the professionals handle their investment's growth and management.
How Do SIP Calculators Work?
A SIP calculator helps users plan for a specific financial need by providing an estimate of the expected returns on a fixed amount invested periodically for a stipulated duration. An online SIP calculator or a mutual fund investment calculator can help investors plan for various financial objectives. Investors can obtain estimated findings from a SIP calculator and utilise the information to make wise investment selections and bolster their asset-creation strategy. SIP instalments are automatically debited from the investor's bank account every month on a fixed date and invested in a mutual fund of the beneficiary's choice.
How Is SIP Calculated?
With the help of an online SIP calculator or a mutual fund investment calculator, SIP maturity value can be calculated. Also, investors can get an understanding of how much money they need to invest periodically and for what period to attain their desired financial goal. Compound interest is used in the calculation of SIP returns. Enter the desired monthly investment amount, expected rate of interest, select the number of years to invest, and the SIP calculator will compute the total estimated returns.
Is A SIP Good For Saving And Investment?
Simple Investment Plans are a great choice for novice or first-time investors since they let one earn excellent returns at lower investment risk. Depending on their income and financial objectives, investors can set aside a fixed amount every month, quarter, or on a half-yearly basis, for a certain period. Mutual funds investments can be initiated with as little as Rs 500 which makes them an attractive investment option. SIP as an investment tool encourages the habit of disciplined investment in people across all walks of life.
What If A SIP Is Cancelled?
Similar to any other financial commitment, SIPs require regular payments that are usually auto-debited from the investor's account on the due date, unless specified otherwise. In the event of three consecutive defaults, the SIP is cancelled. However, one can write a SIP Stop Request to the mutual fund firm at least 30 days in advance. The request can be made offline or online using an application form. Even after the request for SIP termination, the previous SIP investments will remain invested. The scheme's current investment will continue to generate rewards. Stopping the SIP does not imply scheme withdrawal.
Can I Withdraw SIP Anytime?
SIP investments can be periodically withdrawn unless they are under a lock-in period. The amount can be withdrawn via SWP (systematic withdrawal plan) by redeeming a fixed amount at a given frequency. One may choose to withdraw a lump sum amount via a redemption request as and when required. Usually, the minimum withdrawal amounts are specified in the disclosure documents.