Which SIP Calculator is Best for Estimating Returns on Mutual Fund Investments?
Systematic Investment Plans (SIPs) have become increasingly popular among investment enthusiasts and financial planners. These investment strategies involve a monthly or periodic investment into a mutual fund, which has several advantages such as financial discipline and the benefit of rupee cost averaging. To estimate the potential growth and returns on SIP investments, SIP calculators are a valuable tool. In this article, we will review the top SIP calculators available, their features, and the benefits of using them.
Popular SIP Calculators
Almost all stockbrokers like Sharekhan, Groww, Zerodha, Motilal Oswal, and Frye offer SIP calculators on their platforms. These calculators can be used for free to check the future value of your investment. One of the widely used calculators is provided by Kotak Mutual Fund, which is user-friendly and helps estimate returns based on different investment amounts and periods.
Another popular SIP calculator is from mStock. mStock offers two types of calculators: investment-based and scheme-based. These calculators are easy to use and allow investors to calculate returns on their SIP investments. To use an investment-based calculator, an investor simply needs to select the investment type, enter the monthly amount of investment, expected return rate, and time period, and click on calculate. The investor will then know the future value of the investment.
The scheme-based calculator requires the investor to choose the scheme in which they want to invest, select the investment type (SIP or lumpsum), enter the monthly amount of investment, and the time period. Once calculated, the investor will know the future value of their investment. It's crucial to note that SIPs are not synonymous with mutual funds but are one option for investing in mutual funds, along with lump sum investments.
Understanding SIP Calculators
A SIP calculator is a simple tool meant to offer individuals with an idea of the returns they can receive from mutual fund investments made through SIPs. These tools are especially beneficial for millennials and other investors who want to see the potential gains from their investment. A SIP investment in mutual funds has become more popular due to its accessibility and the financial discipline it instills in investors.
The primary role of a SIP return calculator is to compute the wealth gain and predicted returns for a monthly SIP investment. By estimating an annual return rate, the calculator provides a rough estimate of the maturity amount for the provided SIP investment. This allows investors to plan their financial goals and understand the long-term growth of their investments.
Advantages of Using a SIP Return Calculator
The benefits of using SIP calculators are manifold. Mutual fund professionals often recommend SIPs as a more appealing investment option compared to lump sum payments. SIP calculators encourage regular savings, fostering long-term financial stability. Here are the primary advantages of using SIP calculators:
Investment Amount Determination: They help investors determine how much money to invest regularly. Total Investment Overview: They provide a picture of total investment over time, helping investors understand their overall investment journey. Returns Estimation: They estimate the value of the returns you can expect, giving investors a clear idea of their potential gains.Conclusion
Using the right SIP calculator can greatly enhance an investor's understanding of their investment journey. By estimating the potential returns and providing financial discipline through systematic investment planning, SIP calculators are essential tools for both new and experienced investors. Whether you are using a calculator from Kotak Mutual Fund, mStock, or another platform, make sure to utilize these tools to make informed and strategic investment decisions.