Investing funds in a systematic investment plan, or SIP, is now simpler than ever. You can easily choose the amount that aligns with your budget and invest in your chosen scheme.
However, whether you decide to invest over the long term, it is imperative that you plan your investment. Whether for retirement, a child’s wedding, or any other financial goal, you can start a SIP with a fixed amount in mind.
Using this amount as your investment goal, you can use the SIP calculator to plan your wealth-building journey.
How to Use a SIP Calculator
Here are some practical tips on how to use a SIP calculator for long-term investment planning.
To decide the investment amount
SIPs are designed for affordability, allowing you to invest as low as ₹100[EW1] . So, you can use the SIP calculator to decide on a comfortable monthly investment amount. This way, you can easily invest towards meeting your financial goal without straining your budget.
To decide on the number of years you want to invest for
Most SIP calculators allow you to choose the frequency of your investment and the total timeline too. Thus, you can use it to choose how many years you want to continue investing.
This option is ideal for investors who wish to make investments throughout their employment and withdraw the maturity amount on retirement.
To decide the number of years you want to stay invested
Generally, long-term investment requires holding assets for an extended period. Based on what your goal is, a SIP calculator will help you decide the timeline and invest wisely.
When doing this calculation, also keep in mind that if you withdraw your funds before the chosen investment horizon, then you may have to pay a penalty for liquidating the asset.
To visualize your growth for an investment term
Some SIP calculators have a graph built in with the tool that changes with the change in your investment amount, chosen investment tenure and other values. This projection helps you visualise better and understand your investment so you can make a well-informed decision.
Example of a SIP Calculation
Let’s say that you want to save ₹5 Lakhs and are planning your monthly SIP. Say you choose 3 years for this and select 9% as your expected rate of growth. Counting 8% as inflation, the SIP calculator reveals that you need to make your goal amount ₹6,30,486 and your monthly investment comes to ₹15,207.
Similarly, let’s assume that you know how much you want to invest, and this amount is ₹2000 a month for 5 years. With 9% as your expected rate of growth, the SIP calculator reveals that your total investment will be ₹1.20 Lakhs and your total gains will come to ₹31,980.
Advantages of a SIP Calculator
Whether opting for a SIP for long term or short term, here are all the benefits of using the SIP calculator.
Planning the Investment
One of the key benefits of the SIP calculator is that it allows you to strategize your investment. You can choose the ideal investment amount, tenure and even the scheme based on your goals.
Easy to Use
This tool is intuitive and simple, so even first-time investors can analyse their investments. Simply enter all your preferred investment terms, and it will generate your estimated returns promptly.
Free of Cost
There are no fees or charges for using the SIP calculator, which you can access online or on the Bajaj Markets EMI Calculator App.
Instant Results
Instead of relying on complicated manual calculations, you can get accurate and instant results with this calculator.
Unlimited Usage
You can use this tool umpteen number of times, which allows you to make a thorough decision on your investment plan.
Personalised Scheme
Using this tool, you can easily decide on your ideal SIP terms for your financial goals.
No Additional Details
Using a SIP calculator, you only need to provide your investment details. This way, you can compare your investment options without sharing your personal information.
Considering these benefits, it is wise to use a SIP calculator before investing. One of the best tools you can rely on the Bajaj Markets: EMI Calculator App. It gives you access to the compound interest calculators as well as other digital calculators for investing in fixed deposits, ETFs and more. With this all-in-one tool you can plan your loans and insurance too! So make calculations easier than ever and get the Bajaj Markets: EMI Calculator App from Google Play Store now!
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