In today’s era, investments are essential and play a primary role in one’s life. This is because just earning money from your primary source of income is not enough. Many individuals work hard towards earning money, but that might not be adequate to lead the life one dreams.
The primary motive to invest is to fulfil your dreams. Remember, money being idle in your bank account or even locker is an opportunity lost. You should invest your money smartly to earn returns, and one of the smartest ways to do so is to invest in a SIP. A SIP Interest Calculator will help you to make the right and wise investment while going for this savings method.
What is SIP?
SIP, known as a Systematic Investment Plan, is where regular fixed amounts are invested in your preferred Mutual Fund scheme. Here, a fixed amount is deducted each month from your hard-earned savings.
Meanwhile, as the term indicates, it is a systematic method of investing fixed amounts of money periodically. Now, this can be monthly, quarterly or even semi-annually etc.
(Tip: Always use a SIP Interest Calculator to chalk out your investment plan before investing.)
How does it work?
Through SIP, you invest a fixed sum of money in a given period. This amount further lets you purchase a certain number of fund units. Remember, these units of mutual funds are purchased at predefined intervals based on their net asset value (NAV). Then, these units keep on accumulating till the investment tenure, and when you redeem them, the then value is credited into your account.
What are the benefits of a SIP?
- Higher Returns
Compared to traditional fixed or recurring deposits, it provides double the returns. This also helps in beating the inflated costs.
- Emergency fund
SIP is an open-ended fund without tenure, so you can withdraw it as a contingent fund. This will act as a saviour during emergency times.
- Start Small
With SIP, one can start investing small amounts, as small as Rs 500 each month and watch it grow with time. It is not only simple and convenient to track but also makes you save more.
It offers you tremendous flexibility as they are open-ended funds that can be withdrawn as per your choice, meaning they do not have a fixed tenure. So, you can withdraw either the full or partial amount from your investment without incurring any losses. Also, remember, the investment amount is flexible as it can be increased or even decreased easily.
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What is a SIP Interest Calculator, and how does it work?
It is basically an easy tool that allows you to get an idea of the returns on your investments made through SIP. These calculators, readily available on various applications on your smartphone, give an estimated return on investments. It calculates the wealth gain and expected returns for your monthly SIP investment. Therefore, you get a rough estimate of the maturity amount for any of your monthly SIP based on a projected annual return rate.
Now, I use the ‘Bajaj Finserv: UPI, Pay, Loans’ on my smartphone, which offers various calculators, including this one. Of course, as I mentioned above, there are other applications, too, but this one works very efficiently, so it is highly recommended.