A step by step guide to calculating your returns on mutual funds using SIP calculator

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Systematic investment in mutual funds is made through SIP. Through SIP, you can opt either for daily, weekly, monthly or quarterly investments. People prefer SIPs as they are known to generate a good return. Today, many mutual fund agencies provide free access to their online SIP calculators wherein their customers can compute their expected returns.

What makes SIP calculator a handy tool for you?

SIP calculator facilitates the investor to get a rough idea of his expected returns from his investment. These returns are inclined to the annual return rate of your selected fund. This calculator works wonders when you are planning on generating an excellent corpus to satisfy all your financial dreams and responsibilities.

There is no need for you to visit any fund house in person to know about your expected returns. You can easily calculate your expected returns through online SIP calculator. However, it is essential for you to see the fact that this calculator relies on possible inflation rate to compute your exact value.

How does it function?

SIP calculator asks you to feed in all your important data (relevant to your investment). By processing this data, it further guides you through your financial goals, period to invest, and your expected returns.

Step 1: You first need to input an estimated monthly investment amount, which is convenient for you. You can start your investment with as low as 500 INR.

Step 2: In the next level, you need to specify the number of investment years you are comfortable to invest in. On a low note, you can make a SIP investment for a tenure of six months.

Step 3:SIP calculator utilizes your inputs and generates your expected returns based on your fund’s annual return rate.

Advantages of clinging on to a SIP calculator:

There are myriads of benefits behind the use of this calculator. Some of them are –

  • You can strategically plan your financial investment.
  • It helps in simplifying all complicated calculations for providing an exact estimate for your inputs.
  • You just need to input your possible investment amount and investment tenure. Your SIP calculator will do the rest.
  • It is a freely available tool which does not require any input of your personal details to access it.
  • It helps you to plan your investment portfolio within a couple of seconds.
  • There is no need to rely on your fund agent to know what return rates you can expect from your funds.

How can you decide on your rate of return to compute your expected return?

SIP calculator shall ask you about your approximate rate of return. This rate usually is dependent on your risk appetite and the corresponding instruments where you intend to invest in. If your risk appetite is high and you are planning to invest your earnings under equity instruments, you should fix your rate of return to be on a high end and vice versa.

With SIP calculator, it is now easier for mutual fund beginners to get acquainted with all the basics of SIP mediated investments.

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