Thought much about it and are now willing to make a final call with mutual funds SIPs? Well, you’ve probably made the right decision, but understanding if your plan is going to yield results is equally important. Let’s try and understand how you may make informed investment decisions using an SIP calculator.
Mutual fund investments are known to offer good returns. However, you cannot ignore the fact that these investments require meticulous research, analysis, comparisons, and much more. In that case, having a tool that makes calculations easy can be super handy in guiding your investment decisions. A SIP calculator is one of the most popular tools investors use when thinking about investing in mutual funds. It helps you get accurate results and make comparisons, ensuring you make the best choice for yourself.
Why Use the SIP Calculator?
Now, you already know that using a SIP calculator can prove beneficial when investing in mutual funds. Still thinking about how? Well, here are some of the benefits of using a SIP calculator.
- Helps You Make Independent Decisions
With SIP calculators, you calculate your premiums and expected returns, make comparisons, and do much more. This easy calculation comes in handy for choosing the right investment options for you and making independent investment choices.
- Gives Accurate Results
SIP calculators are designed using several factors like net asset value, internal rate of return, and much more. Such a design helps the calculator produce quite accurate results.
- Helps You Pick the Right Plan
As these calculators help you understand the returns on each investment, you may make comparisons. And finally, choose the plan that best matches your financial goals and risk-taking abilities.
- Easy-to-Use
The best part about using these SIP calculators is that they come with a user-friendly interface. This means they are quite easy to use and understand. You simply need to log in the relevant inputs like monthly investments, investment tenure, etc and get instant results at your fingertips.
Make the Best Use of the SIP Calculator
There are several benefits of an SIP calculator, such as simplifying your investments. Here is how you can make the most of them.
- Get Guidance on the Right Investment Amount
Planning investments and calculating how much you need to invest so that they match your financial goals can get confusing at the start. But you can solve the same using these calculators. The returns calculator can give you accurate results, helping you understand how much you need to put into fetching the desired returns in the future. Thus, you may calculate the right investment amount to collect your desired returns using an SIP calculator.
- Get Accurate Calculations on your Investment Value
As mentioned, the SIP calculator helps you understand the estimated returns, which comes in handy to calculate the amount you’re willing to invest. But wait! As mentioned, you also get to calculate estimated returns. That is something amazing already. The calculation of estimated returns can help you choose the right investment plan based on your financial goals.
How to Best Use an SIP Calculator?
Here are some of the best tips to effectively use your SIP calculator.
- Fill in the Accurate Inputs
To make sure you make the best use of SIP calculators, always be careful while filling in the inputs. Fill in all the details, such as expected rate of return, investment tenure, and amount, correctly and cross-check. Small mistakes can create big errors.
- Don’t Miss the Inflation
While logging in your SIP inputs, don’t forget to take inflation into account. As you’re planning for a future investment, understand that inflation is going to affect the money’s purchasing power. Take all this into consideration, and then make investment calculations.
- Be Realistic
It is natural to be attracted to higher expected returns. However, you should not forget to be realistic. Keep a practical approach to expected returns and invest accordingly.
- Identify Risks
As an investor, you must be aware of the fact that no investment is risk-free. This means there is a certain amount of risk involved in all investments, though they vary based on the investment plan. Try using the SIP calculator to estimate these risks and the downside of your investment to keep yourself immune.
Bottom Line
When thinking of investing in mutual funds, a SIP calculator is a must-have. It helps you in several ways, from helping you calculate the right SIP investment amount to expected returns, risks, and much more. You can also use it to compare different plans and their benefits and make investment choices accordingly. To sum up, it is safe to say that with an SIP calculator, you are empowered as an informed and independent investor. Further, you can take better control of your future investments. Plan, compare, and invest wisely with SIP calculators.
Also, don’t forget, when investing in mutual funds of your choice, to store them safely in a demat account. While MFs do not mandate a Demat account opening, it can prove beneficial in several ways. Your portfolio management becomes easy, plus all your securities are stored safely and organized in one place.
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