SIP calculators are online tools that help investors calculate the potential returns on their investments based on various factors such as investment amount, SIP tenure, and expected rate of return.
A mutual fund SIP calculator can provide several benefits to investors. We will be discussing
them at length in this article.
Benefits of Mutual Fund SIP Calculator
Investors who want to make mutual fund investments through a Systematic Investment Plan need a mutual fund SIP calculator (SIP). With the aid of SIP calculators, investors may determine the possible returns on their investments based on a number of variables, including the amount invested, the length of the SIP, and the expected rate of return. You should not overlook the following advantages of using a mutual fund SIP calculator:
- Helps in Better Planning of Investments
A mutual fund SIP calculator can help investors plan their investments better. Investors can use the calculator to gain a clear understanding of the potential long-term profits they can expect from their SIP investments. This aids investors in setting sensible investment objectives and selecting wise investments.
For instance, an investor can use the calculator to work out how much money they will need to set aside each month in order to save for a stress-free retirement or a specific amount for their child's education if they wish to study abroad. Investors can plan their monthly budget and make necessary changes to their expenses by understanding the required investment amount.
2. Provides Clarity on Potential Returns
A mutual fund SIP calculator also offers clarity on the probable returns that investors can anticipate from their investments. The calculator computes the possible returns by considering a number of variables, including the investment amount, SIP duration, and estimated rate of return.
The calculator can be used, for instance, to calculate the possible profits for an investor who wants to invest INR 7,000 per month for 10 years in a mutual fund with a 12% expected rate of return. The calculator would clearly show the predicted returns while accounting for the investment's compounding effect.
3. Helps in Comparing and Evaluating Mutual Fund Schemes
An investor can use a mutual fund SIP calculator to analyse and assess many mutual fund schemes and choose the one that gives the greatest returns based on their investment objectives and risk tolerance. The calculator can assist investors in determining which mutual fund scheme suits their investment objectives and risk appetite the best by showing them how various mutual fund schemes will perform over time.
If a potential investor wants to invest in equities mutual funds, for instance, they may use the calculator to analyze various equity mutual fund schemes and select the one that gives the highest returns given their investment period and risk tolerance.
- Enables Investors to Make Informed Decisions
Investors can also use a mutual fund SIP calculator to help them make wise investment choices. They can use the calculator to choose their investment amount, duration, and mutual fund scheme because it gives them a clear sense of the expected profits.
For instance, if a potential investor is uncertain about the sum or duration of their investment, they can use the calculator to assess various scenarios and select the one that best suits their investment objectives and risk tolerance. This can assist investors in streamlining their portfolios and increasing returns.
- Facilitates Goal-based Investing
Goal-based investing can also be facilitated by a mutual fund SIP calculator. Investors can use the calculator to define precise investing objectives and work overtime to achieve them. This can assist investors in saving money for particular objectives like schooling, retirement, or home ownership.
For instance, the calculator can be used to calculate the minimum investment amount and duration for an investor who intends to save a particular amount of sum for retirement. The investor may plan their monthly budget and make necessary modifications to their expenses by knowing the required investment amount.
- Helps in Adjusting Investment Amount or Tenure
In order to accomplish their intended investment goals, investors can change their investment amount or tenure with the use of a mutual fund SIP calculator. Investors can test several scenarios using the calculator and select the one that best suits their investment objectives and risk tolerance. Moreover, if you are investing in ELSS tax saver funds, you can claim tax benefits under Section 80C.
In conclusion, The Mutual Fund SIP Calculator comes packed with several reasons to give it a try, including saving on tax under Section 80C of the Income Tax Act, 1961. Use the free, easy-to-use tool now to enjoy the benefits.