Home Finance How a SIP calculator help plan your financial goals?

How a SIP calculator help plan your financial goals?

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An investor- new or existing, invests and remains invested with a basic objective – to attain or inch closer to their financial goals. However, these goals are of different kinds, based on the lifestyle, age, current income and expenses and other factors like risk taking appetite and time horizon of the investor. 

Some investors might invest with a short term goal of buying a car or some may have a long term goal like their child’s higher education or buying a home etc. Whatever goals the investor might have, the solution remains one – Investing in the right assets. Money lying in bank account will never grow or multiply, but if the same money is invested in mutual funds, it can grow significantly with time. 

In case of investment of your hard earned savings, SIP mutual funds can be a great way to explore investments in mutual fund schemes of your choice. SIP offers convenience, hassle free online investing, and a variety of fund options for mutual fund investors. You may invest in SIP every month from the surplus that is left after meeting monthly expenses. 

Before you start SIP mutual fund investment, be careful in fund selection. For example – If the SIP is for a short term period, say less than 4-5 years, it is better to start SIP in debt mutual funds. However, if the investment period is long term, greater than 5 years or more, choosing equity mutual funds would be a wise decision. 

Suppose you have selected the mutual fund schemes to invest in SIP, the question is what the right amount for your SIP? This is where a SIP calculator can help you. In a SIP calculator, you can enter the goal amount (say it is Rs 1 Crore), your SIP period (say 20 years) and the expected returns (say 12%), then the SIP return calculator will display your monthly SIP amount as Rs 5,346. You need to invest only Rs 5,346 through monthly SIP to reach your goals. As you can see, the SIP amount is very small, however, without using the SIP calculator you would not have known this.

Not let us try another function in the SIP calculator – Knowing your SIP maturity value. Let us know enter the monthly SIP amount (say it is Rs 10,000), your SIP period (say 20 years) and the expected returns (say 12%), then the SIP return calculator will display the SIP maturity value as Rs 99.91 Lakhs. 

As you can see from the above two examples, SIP calculator is the most easy to use tool for planning your mutual fund SIP. It is an online tool which you will get on all AMC websites and mutual fund research websites. 

We can sum up the benefits of a SIP return calculator as follows –

  1. Helps take informed investment decision for your SIP investments
  2. You can clearly know how much to invest through SIP to reach your goals
  3. By using the SIP calculator, you clearly know, what would be the maturity value of your existing or new SIP mutual fund investments.

Is summary SIP mutual fund is a most simple way of reaching your financial goals, but to have a clear direction for your financial goals, using a SIP calculator may be of great help! 

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