A SIP calculator is a web-based application that estimates the return on your SIP investment using an expected rate of return and the investment’s projected value after a certain number of years. Because SIPs usually need a monthly payment, the manual calculation might be time-consuming.
What is a SIP Planner, and how does it work?
SIP calculator is one of the best tools to check the amount of the capital that you have invested till now. As a result, a SIP planner is a larger idea that uses the SIP return calculator to assist investors in gaining a better understanding of their investments. Let’s compare and contrast the two tools.
SIP Planner vs. SIP Calculator
The Systematic Investment Plan calculator effectively bifurcates the future value of the SIP investment into two figures: the expected return on the investment and the principal. Simply defined, a SIP stands for Systematic Investment Plan, and it is a method of investing in mutual funds on a regular and systematic basis. THe calculator helps in bringing you the right results so that you can keep a check on your profits and losses and stay updated.
When evaluating your investment, the SIP planner also allows you to account for inflation. For example, if you want to earn a 12 percent real rate of return (actual returns less inflation), you’ll need to invest in a fund with a higher rate of return than 12 percent.
When using the SIP calculator online, you may also account for inflation, but not explicitly. You might achieve this by manually calculating the nominal rate of return on your investment based on your goal real rate of return and the current rate of inflation.
What Are the Benefits of Using a SIP Calculator?
The Systematic Investment Plan calculator, as you may know, allows you to assess three figures: your principal, the returns received on the principal, and the investment’s future worth. It calculates how much you’ll make on your investment if you put in X amount per month for Y number of years at a Z rate of projected return. These figures can be entered into an online SIP calculator. Let’s imagine you’re saving for your child’s college education. You’ll need a total of 20,000 lakh in five years, and you may start investing 20,000 every month right now.
Investments in market-linked vehicles, such as Mutual Funds, do not guarantee a profit. As a result, investors may have trouble estimating how much their money will increase in the future or how much they will need to invest to achieve a given objective. Are you looking for a way with the help of which you can calculate the total amount invested in the SIP? Use 5Paisa SIP calculator for mutual funds. Simply input a few data such as the monthly SIP amount, the SIP tenure, and the compounded rate of return you estimate from the mutual fund in which you are commencing your investment to determine the value of your monthly SIP.