SBI sip calculator: state bank of India (SBI) mutual fund AMC is a leading fund house in the whole India and it is India’s largest public sector bank. This SBI management is engaged in providing a range of mutual fund investment services across main categories of debt, quality and hybrid to millions of investors across the country.
Recently SBI has invests a one of the most popular routes in SBI mutual fund scheme is the systematic investment plan (SIP). This SIP plans are providing a small savings, investors and the opportunity to create a large cumulative savings corpus for the future by investing small amounts at a regular intervals of time. This SIP calculator tools is free of cost to calculate return on SIP investment on SBI.
What is SIP:
The SIP stands for systematic investment plan which is flexible and easy method that remarkably helped in disciplined long-term gains, savings and highly convenient for a wide range of customers. This investment can be commenced on various spans like monthly or quarterly or yearly and which is significantly help in future benefits. This SIP calculator can allows you to track your investment earnings at the end of a specific on monthly basis.
How SIP works:
The concept of SIP calculator is very similar to the bank recurring deposit for most part. When you set up a SIP calculator in daily, weekly, monthly investment capital specified by you gets automatically debited from your registered bank account on a particular date. These all predetermined amount gets invested in a SBI mutual funds scheme of your choice.
It is very important to note here that your individual investment amount will remain unchanged and you have to keep your mind that NAV of the fund that you have chosen will vary daily. The more number of units purchased will tend to vary from one installment to another SIP.
Let’s take one example. You are investing 500 rupees per month through an SIP. First time you are invest through the systematic process and the NAV of your chosen SBI MF scheme is 50 rupees and thus you purchase 100 units of the scheme.
In the next time your SIP payment occurs, the scheme NAV has increased to 60 rupees, in that way you are able to purchase only 8.33units of the scheme. If alternately NAV declines to 40 rupees and it would be able to purchase 12.5 units in the same scheme. This feature is called as rupee cost averaging and it is very beneficial in the long term and in the following section.
There are five processes to investing your large or small investment plan in the SIP scheme.
1.Disciplined Investments: In this SIP, one of the one of the main factors that determine future wealth is financial discipline. This investment is very easy to ensure that you save manage to do this with consistency. Disciplined investing in a SBI SIP helps inculcate financial discipline in the investor.
2.Rupee cost averaging: we are discussing this topic in earlier the total price of the individual units is equal to the average NAV as per the different dates on the SBI SIP and its occurred due to the rupee cost averaging effect. These investors are no longer to worry about timing the market. It means wait for an opportune moment to enter into market.
Timing the market is a very difficult to master and few. If anyone have manage to perform this timing the market it consistently over an extended period of time. SBI SIP system will completely eliminates the need for activities, at that time rupee cost averaging of SIP works in the favor of novice investors.
3.Flexible investment tenure: in this case mutual funds schemes are managed by SBI mutual fund AMC. Number of maximum SIP installments can be as six months only. If you want to change your tenure at a later date after the SIP has been started without a hitch.
4.Flexible investment amount: you can start by individual investors with an amount as only 500 rupees for each installment by using the SBI SIP. if you want to increase or decrease the individual amount as per her/his savings capability as long as individual installment but not less than the 500 rupees. This is the main reason to increase the SIP investments significantly in recent years.
5.Long term benefits of compounding: in generally mutual fund investments are subject to the general rule the earlier you invest and the more your wealth grows over time.
Different types of mutual funds:
There are 7 major types in mutual funds that is,
- Money market funds.
- Fixed income funds.
- Quality funds.
- Balanced funds.
- Index funds.
- specialty funds.
- Funds to funds.