Did you know that nearly ₹8,500 crores are invested in mutual funds every month through SIPs? Needless to say, SIP is a buzzword among investors. So what exactly is a SIP? A SIP or Systematic Investment Plan is the smartest way in which you can invest a fixed amount in a mutual fund.
The flexibility of SIPs is that you can invest in mutual funds at regular intervals, such as weekly, monthly, quarterly, etc. SIPs help you achieve your financial goals by leveraging rupee cost averaging and are fueled by the power of compounding.
Here we’ll learn about how you can calculate SIP returns using an online tool- SIP return calculator and also study the top-performing SIPs for a 5-year investment plan.
A Systematic Investment Plan Return Calculator, simply known as the SIP Calculator is an important tool that gives you a possible analysis of your Systematic Investment Plan (SIP). If you want to fulfill your financial goals, the SIP Calculator can help you determine:
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Here’s how a SIP return calculator will help you analyze your investment:
The returns that you earn in SIP are compounded. Using a SIP calculator, you can easily calculate the expected target that your SIP would grow into and you can also calculate the standard monthly contribution needed to achieve your desired financial goal.
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If you want to invest in the short-term, debt mutual funds are the best. Short-term investment ranges from 1 to 5 years. On the basis of fund performance, the best SIPs for a period of 5 years are stated below:
According to wealth planners and finance experts, investing in mutual funds through Systematic Investment Plans is an excellent way to become financially disciplined and get into the habit of saving.
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In this process, the Systematic Investment Plan Calculator (or, SIP return calculator) is an important tool that helps you determine the amount you can gain at the end of your SIP tenure. All this being said, it is also to be kept in mind that mutual fund investments are subject to market risks. This is because the value of assets can either increase or decrease in the future.
SIPs help you achieve your financial goals by leveraging rupee cost averaging and are fueled by the power of compounding. The compounded interest boosts the mutual fund returns. If you want to take the easier and more convenient road, you can use the SIP return calculator to determine the amount you should invest in a SIP to reach a target corpus after a certain period of time.
SIP returns vary from fund to fund. Generally, a return of 12-18% can be expected for large-cap equities, and the expected rate from mid-cap equities is around 14-17%. On the other hand, one can expect a return of 6 – 9 % p.a. for a long-term debt-based mutual fund,
There is no maximum tenure of SIP. You can keep it going till your desired corpus is achieved.
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