It is a financial tool that helps investors to calculate the returns on their investments made through the systematic investment plan (SIP) route. SIP is a method of investing a fixed amount at a regular intervals (weekly, monthly, quarterly, etc.) in a mutual fund scheme.
How to use SIP Calculator
To use a SIP calculator, you will need to input the following details:
- The amount you want to invest through SIP
- The frequency of investment (weekly, monthly, etc.)
- The expected rate of return on your investment
- The duration of your investment
Based on these inputs, the SIP calculator will calculate the total amount of money you will have at the end of your investment period, along with the profit or loss made on your investment.
How a SIP calculator works:
Suppose you want to invest INR 500 per month for a period of 5 years through SIP, with an expected rate of return of 12% per year. The SIP calculator will calculate the total amount of money you will have at the end of the 5-year period, taking into account the frequency and expected rate of return on your investment.
In this case, the SIP calculator will show that you will have a total of INR 3,64,837 at the end of the 5-year period, including the profit made on your investment.
SIP calculators are useful for investors as they help them to understand the potential returns on their investments and make informed decisions about their financial goals.