Systematic Investment Plan (SIP) is a type of investment scheme offered by companies with mutual funds. Using SIP one can invest small amounts in a selected mutual fund periodically (weekly, monthly, quarterly). SIP provides a well-disciplined and passive approach for investing the retail and to create long-term wealth ( by using compounding power). Moreover, the amount is to invest at regular intervals (usually every month), due to the impact of market volatility is also reduced.
What Is SIP Calculator?
For any investor who wants to invest through SIP, it is the handiest tool. The investor should know tenure, expected interest rate and SIP amount before starting the calculation. The SIP calculator is easy to use and helps to calculate expected amount into a complex formula without any digging in mathematics. The investor who are ready to use can adjust the input as per the obtain appropriate expected return. The complications of periodic investments while calculating the exact value with 100% user-friendly technique after accuracy. Moreover it is best tool and free without paying
Advantages of SIP Calculator
Rupee cost averaging:
Instead of trying for the time in the market, the investor benefits is an averaging factor for rupee-cost by investing regularly. However, the investments are made over different market cycles. And also the investor benefits from the market volatility by buying more units from the same fund when the markets are low and buying less when the prices are higher.
Power of Compounding
Compound interest is said by noted scientist Albert Einstein to be the world’s eighth wonder. The compounding rule is simple; the more you benefit, the earlier you start. It is deployed to earn a return for every single rupee you invest. This is the turn may also be capable of earning more returns in the future. A regular mutual SIP fund is compounding your money and helping to build up the wealth.
Steps that you need to follow to start your SIP
- Set Your Finance Goals.
- Plan Your Investment Horizon.
- Measure Your Risk Appetite.
- Invest Online/Offline.
- Application form.
- Decide Mode of payment.
- KYC Compliance.
- Invest Directly/Through Financial Advisors.t
- Decide Date and Amount of SIP.
- Select Fund Type.
How Does Systematic Investment Plan Works?
The systematic investment plan or SIP operates flexibly. If you invest in SIP, the amount of money you invest at a specific time interval will be debited automatically from your bank account, so you don’t forget to make any investment. You are assigned NAV or net assets for a particular day. This is the number of units that you are allocated based on the current market rate. With each investment you make, after they are purchased at market rate, additional units that are part of the schemes are added to your account. For this reason, after buying units at different rates, investors make a profit because of the power of compounding and rupee cost average. That’s the way SIP Calculator works.