Systematic Investment Plan Calculator

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Systematic Investment Plan Calculator
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What is SIP and SIP Calculator?

• SIP SIP is an abbreviation of a Systematic
  Investment Plan. It is an investment strategy to
  invest in a certain amount of money at regular
  intervals of time in a mutual fund scheme. It is
  a fixed amount of money is auto-debited from the
  bank account of the investors and is assigned
  several units, as per the present Net Asset Value
  (NAV). SIP investment plans are the smartest and
  most convenient way of investing in mutual funds.
• SIP Calculator As the name suggests SIP
  calculator helps to calculate the wealth gain and
  the expected returns for the monthly SIP
  investment. User can get a rough estimate on the
  maturity amount for any monthly SIP Plan, based
  on the projected annual return rate.

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Types of SIP

• Top-up SIP In this type of SIPs the first
  installment is fixed, and the incremental amount
  and frequency of the increment are pre-decided.
  This leads to an automatic increase in the
  investment amount at regular intervals.
• Flexi SIP Here, whether you have chosen the
  monthly or daily, to pay different SIP amounts
  every time. This gives you, as the investor, a
  benefit of not being bound to pay a certain
  amount every month or daily but decide according
  to the cash flow at the time of SIP payment.
  Thus, in case you have a cash crunch you can skip
  the installment as per the requirement. However,
  it is also recommended not to do so unless you
  understand the market conditions and invest.
• Perpetual SIP Under this type the paying SIPs
  without an end date. Not for a year, 3 or 5
  years, but keep going till one wish. If you opt
  for this scheme, you have the option to redeem
  the fund at a time of your convenience.
• Trigger SIP This SIP is for the ones that
  understand markets well, then this type of SIP
  gives you the option to use that knowledge. You
  can set a NAV or index level or event or a
  particular date to start the payments for this
  type of SIP. Trigger SIP encourages speculation
  and is therefore not preferred by many.

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Features Benefits of SIP

• Rupee cost averaging If you choose to invest in
  a fixed amount of money every month via SIP, you
  will see that more stocks are purchased when the
  price of the investment falls. This
  simultaneously brings down the average cost of
  buying a financial asset over time.
• Convenience Investing in SIP is a simple and
  hassle-free process. You can instruct the bank to
  activate or facilitate you with the auto-debits
  from your bank account. As nowadays everyone is
  online, you can also visit the website of the
  fund house of your choice and click on the link
  for the SIP registration link or the tab.
• Disciplined Saving To achieve anything in this
  world discipline is meant as an essence. By
  investing in SIP, you commit to saving regularly,
  and every investment takes you a step closer to
  reaching the financial objectives.
• Compounding A small sum of money invested in SIP
  on a regular interval can grow into a
  considerably the big amount. Through the power of
  compounding, the interest earns interest,
  allowing you to fetch a substantial amount of
  earnings.
• No need to time the market It can be a big
  dilemma for many to knowing when the right time
  is to invest in the market. As it is hard to
  predict that when the market will be at its peak
  or its low point. While SIP is not free from the
  market volatility.

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How to use SIP Calculator?

• SIP returns are calculated based on the compound
  interest. However, the SIP calculator may vary in
  functioning as it depends on the site you are
  using. Here are the generic steps of using a SIP
  calculator
• Step 1 Enter the amount you want to invest.
• Step 2 Choose the number of years you are
  willing to continue the investment.
• After providing this much information the SIP
  calculator will automatically calculate the
  amount of return.

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What is SIP Advanced Calculator?

• SIP Advanced Calculator is an upgraded version of
  the basic SIP calculator.
• It would calculate the return of post inflation.
• This shows a better picture of the maturity value
  considering inflation.
• Generally, it requires basic information like the
  monthly investment amount, investment tenure in
  years, expected the rate of return and the
  expected rate of inflation to arrive at the
  maturity value, pre and post inflation.

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Why Should you Invest In SIP?

• Finance Future Goals Futures goals like buying a
  house, childs education, retirement plans, etc
  can be achieved with the help of SIP. You can
  build a corpus over a period by investing a
  monthly basis.
• Diversification Almost every market expert
  encourages investors to have a diverse portfolio.
  In the same way, SIP can help you acquire the
  advantages of diversification even if you invest
  a small amount. The risk is divided as you invest
  in different holdings. In this way, you can make
  better gains.
• Minimizes Risk Factor When you invest in the
  Equity Mutual funds through the SIPs, the risk
  factor minimizes and ride through the ups downs
  of the equity market. This is because the
  investment is small and is spread over a period.
  Due to this, market timing is not something to be
  worried about.
• No Pressure of Market Timings If one invests in
  a lump sum of amount, it is important to time it
  well. You can buy a large number of stocks but if
  you do not time the market well, then you the
  chances of losses increase. Such worries can be
  reduced by investing with SIPs as the amount
  invested is small.
• Disciplined Investing SIP investments help you
  to build up a habit of investing regularly. It
  makes you more disciplined in terms of investing.
  When you start investing through SIP, a fixed
  amount gets deducted from the bank account each
  month.

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Is SIP Safer than Lump-sum Investment?

• Rupee Cost Averaging SIP allows for averaging an
  investment cost. The fundamental mantra behind
  rupee cost averaging is to get more units for a
  lower price. When markets fall, you get more
  units of the scheme. When markets rise you get
  fewer units for the same amount. In this way,
  your average cost per unit in the volatile
  markets turns out to be lower than when you
  invest in a lump-sum.
• Safer in volatile markets With a SIP the risk
  from market volatilities is lower because your
  investment is averaged out. Whether the markets
  are high or low, your investments continue.
  Unlike a lump-sum investment, you dont need to
  time the markets.
• Flexible Payments You can customize the SIP
  investment based on the financial situation or
  affordability. So, lets say you start with a
  small SIP in line with the income. As your income
  increases, you can choose to increase the SIP
  contribution. This increases the chances of
  achieving personal financial goals by
  accumulating greater wealth.

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Thank You !!!