An overwhelming majority of Indian investors trust the SIP (Systematic Investment Plan) mode of investment when investing in mutual fund schemes. The total amount collected through SIPs in February 2024 amounted to ₹19,187 crore according to the Association of Mutual Funds in India (AMFI). If you wish to make the most of this trend and grow your wealth through mutual fund investments, you must know about an effective online tool that can completely transform your investments – an online SIP calculator.
Features of online SIP calculators and the benefits of using them
- You can access a mutual fund calculator online for free: You read that right! An online SIP calculator can be accessed for free at any hour of the day. Banks, financial institutions, and mutual fund houses host these tools on their sites to help customers make the most of their mutual fund investments.
- Online SIP calculators offer instant results: You must enter three categories of input while using an online mutual fund calculator – your monthly investment amount, the expected rate of return, and time period (in years). You can instantly check the value of your investment on maturity after entering these details.
- You can use an SIP calculator to know your ideal investment amount and duration: Online SIP calculators offer a very unique feature to help you select the right mutual fund scheme. You can enter different values in the ‘investment amount’ field to know the right amount that you must invest to meet your financial objective in a given period. This feature also helps you compare various mutual fund schemes and select the one offering higher returns. It also helps you gauge your risk appetite and decide on a suitable investment tenure.
- SIP calculators help you start your investment with a low amount: You can benefit from the affordability of SIPs and choose an amount as low as ₹500 while starting a mutual fund investment. Online SIP calculators can also help you calculate the minimum amount you must invest to reach your financial goal in time.
- Online SIP calculators offer personalised results: The results that you see after using an online SIP calculator are calculated based on your investment portfolio and risk appetite. These personalised results help investors plan their investments better.
- SIP calculators account for inflation while calculating your future returns: An online SIP calculator – even while calculating the future returns of a long-term mutual fund investment – helps you estimate the returns by accounting for inflation. You can rest assured that the results offered by an SIP calculator are accurate and based on thorough analysis.
- SIP calculators can help you benefit from the power of compounding: The power of compounding helps investors exponentially grow their returns by helping them earn interest on interest. A step-up SIP calculator can also tell you the percentage or amount by which you must increase your SIP investments to benefit from the power of compounding in the long run.
In summary, using an online SIP calculator to plan your mutual fund investments can help you significantly grow your returns. You can also use these online tools to fix the right investment amount and tenure based on your risk appetite.
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