Mutual Funds have become a famous alternative for investment, and their popularity is growing with each passing day. An investor can diversify the portfolio and reduce the volatility risk. Additionally, Mutual Funds offer a lucrative Systematic Investment Plan through which you can invest monthly, depending on your spending capacity.
The easiest way to calculate SIP is the Mutual Fund calculator. It is an automated tool that creates an investment strategy that suits your investment targets.
What are SIPs? How can a mutual fund calculator help?
SIPs are an option provided by the fund houses through which you plan your investment goals by making monthly payments. It is a disciplined investment as you commit to investing a portion of your salary regularly. Another unique feature is that you can start with as low an amount as Rs. 500, and the gaps can be weekly/monthly/semi-annually or annually.
SIPs offer the power of averaging and compounding if invested for a more extended period. A Mutual Fund calculator plays a significant role in helping you with your calculations. Following are the ways:
- The calculator shows the maturity value you wish to invest. It also helps set your financial goals according to the amount you want to invest in SIP.
- Personal goals require personal attention, and the calculator does the same. You can use it anywhere and according to your comfort.
- Since the calculator shows you the maturity value of your investments, you can choose a return rate above inflation, and the calculator shows the desired return value.
How to use the calculator?
Knowing how to use the calculator properly is also essential. For calculating SIPs, you need the following:
- Select the SIP option in the calculator.
- Fill in the amount you wish to invest every month.
- Fill in the SIP period and expected rate of return accordingly.
- After all these inputs, the calculator computes the final investment amount.
Manual calculations may lead to errors. However, your estimates on the calculator are quick and accurate. Additionally, it gives you a fair idea about your SIP goals.
Conclusion
Mutual Fund calculators, even though they are user-friendly, the result varies due to numerous factors. Also, it does not clarify the exit load and expense ratio, if there are any. Nevertheless, the calculator computes the wealth gained from your SIP and helps you achieve the personal financial targets that you have set for yourself. A Mutual Fund calculator can be beneficial even for beginners who wish to invest in them.
Therefore, if you wish to incorporate SIPs in your portfolio, the use of a calculator should be considered for accuracy and quick results.