Systematic Investment Plans, commonly known as SIPs, have become extremely popular among Indian investors in recent years. SIPs allow investors to invest small, regular amounts into mutual funds and other financial instruments. This method of investing helps investors take advantage of rupee cost averaging and the power of compounding to build wealth over time without having to time the markets. A sip calculator online tool that allows investors to calculate returns on their SIP investments. It is a very useful tool, especially for new investors who may not be able to do complex investment calculations on their own. In this article, you will look at 5 major benefits of using an online SIP return calculator.
The main benefit of an SIP calculator online is that it helps estimate returns from your SIPs based on assumed figures for time period, monthly contributions, expected rate of returns etc. For someone new to SIPs and investments, manually working through the math can get confusing. The SIP calculator does this work for you and gives you an estimate that helps you set expectations.
An online SIP calculator easily allows you to test different SIP investment scenarios. For instance, you can check the impact of increasing the monthly contributions by Rs.1000 after 2 years or calculate returns if the SIP tenure is increased by 5 years. Doing this manually would be tedious and time-consuming. The ability to model different scenarios allows investors to test assumptions and finalise an optimal SIP investment plan keeping long term financial goals in mind.
One of the most useful features of an online SIP return calculator is that it can accurately demonstrate the power of compounding i.e. earning returns on reinvested returns to accelerate wealth accumulation over long periods. Manual calculations often incorrectly assume simple interest instead of compound interest and thus under-estimate final returns. The online calculator applies accurate compound interest formulae and projections that give investors a better sense of how small investments can snowball into a large corpus over 10,15 or 20 year periods with the magic of compounding.
Investors today are spoilt for choice when it comes to investment options – mutual funds, stocks, bonds, bank FDs, NPS, gold, real estate etc. An online SIP return calculator allows you to input assumed figures for different options and get quick estimates of maturity values. Rather than making separate calculations in excel or on paper, you can simply use the calculator to get results. This allows you to easily compare returns from different monthly SIP investment plans and finalize the ones that align best with your financial goals and risk appetite.
Online SIP calculators are completely free to use without any subscription costs or hidden fees. It requires no download or sign-up either unlike standalone financial calculators or paid robo-advisory tools. You simply access the calculator online and use it for all your estimation and projection needs anytime at your convenience.
An online SIP return calculator is a useful planning tool for retail investors in India. Allowing quick computation of various mid cap funds investment scenarios, it helps estimate returns, compare instruments, understand compounding, and optimize SIPs for goal achievement. Being free, convenient and easy to use, online SIP calculators fill an important need-gap for many individual investors who lack sophisticated finance skills.