Setting and working towards financial goals is an essential part of financial planning. Whether you want to save for retirement, your child’s education, buy a house, or build an emergency corpus – having clear goals is the first step. To reach those goals, you need to invest wisely and consistently. This is where a Systematic Investment Plan (SIP) can be an effective investment strategy. Read on to understand the benefits of the SIP calculator in achieving your financial objectives.
What is an SIP?
A Systematic Investment Plan allows you to invest a fixed amount at regular intervals in mutual funds. Depending on your convenience, you can invest monthly, quarterly, or annually. SIP instils discipline and eliminates the stress of timing the markets.
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The most significant benefit of SIP is rupee cost averaging. Since you invest a fixed sum constantly, you buy more units when the price decreases and fewer units when the price is high, averaging the purchase cost over time.
How Does an SIP Calculator Help?
A SIP calculator is a convenient tool when it comes to financial planning. It helps you calculate the future value of your SIP investment. All you need to do is enter the following details:
- Monthly SIP amount
- Expected rate of return
- Investment tenure
Benefits of Using an SIP Calculator
Here are some of the benefits of using an SIP calculator for financial planning:
1. Estimate Corpus Required
The calculator helps estimate the investment amount needed to reach your goal. For example, if you want ₹ one crore for retirement in 20 years, the calculator will forecast the monthly SIP required.
2. Change Variables to Plan Better
To create the best investment plan, you can change variables like tenure, investment amount, and expected returns.
3. Track Progress
The SIP calculator makes it easy to track your progress. You can periodically check if your corpus is growing as per projections. If not, you can increase the SIP amount or tenure.
4. Retirement Planning
Long-term goals like retirement require disciplined investing. The SIP calculator helps you plan your retirement investments wisely to accumulate the needed corpus.
5. Achieve Multiple Goals
You can use the calculator to plan for different goals simultaneously, such as retirement, child’s education, vacation fund, etc.
How to Use an Online SIP Calculator?
Many financial websites and mutual fund company portals offer free SIP calculators. Here is a step-by-step process to use them:
Step 1). Visit the SIP calculator page and enter the initial details like goal amount, investment tenure, and expected returns.
Step 2). Enter your chosen monthly SIP amount and click Calculate.
Step 3). The calculator will forecast the future value. See if you will reach your goal amount.
Step 4). If not, change the parameters, such as increasing the SIP amount or tenure. Re-calculate to arrive at the right investment plan.
Step 5). You can also compare different SIP amounts and tenures.
Step 6). Once you finalise the ideal monthly SIP, start your SIP investment.
Conclusion
A SIP Calculator is your key to successful financial planning and goal achievement. It helps you determine the monthly investment needed to accumulate the desired corpus. Additionally, a SIP enforces discipline and maximises your earnings through compounding.
So be wise and start planning your finances today with a free EMI calculator from Acko. It can help you set the right SIP amount and make that SIP investment work hard for you. With Acko’s user-friendly EMI calculator, you can easily estimate your future SIP earnings. Use it to plan your investments and achieve your financial objectives through disciplined SIP investing
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