We all have heard the word SIP in almost every economic and financial discussion at home and now, the word calculator is also being used with it. Okay, okay. Before you wrap your head around those terminologies. Let’s begin with understanding the fundamentals first.
What is an SIP?
SIP is a term used in the finance world and it stands for Systematic Investment Plan. It refers to the sum of money that is invested by an individual regularly, as part of a mutual fund investment plan.
SIP is an effective way for individuals to plan for their future and to build a money corpus that can be accessed during emergencies or for big milestone purchases like a house. Nowadays, due to financial awareness, many young men and women are choosing to start an SIP. To support the purpose of this, SIP calculators have come into great prominence.
What is an SIP Calculator?
An SIP calculator is a tool that helps prospective investors (that is individuals) to estimate the funds needed to generate a certain amount of money from investment. For example, A earns 2000INR every month and she wants to build a corpus of 50,000INR in the next 4 years. A will use an SIP calculator for this and find out the how much she needs to shell out each month to get that decided amount of 50,000INR as a return on her investment.
Calculating this whole thing is a bit challenging, and that is why in the older days people left this task to their financial advisors or accountants. However, now the situation is much simpler with the coming of technological developments which have led to the creation of SIP calculators. It generally requires three input values to work- the investment amount, the investment period and the expected rate of return. Once you do that, you can find the amount that you will be able to earn by the end of your financial investment.
An SIP calculator offers accuracy to people who are on their financial planning journey or who want to start with it, without any hassles. You can try the My Funds SIP Calculator and give a shot to mutual funds investment planning too. If you need any further assistance, then we can still help you! My Funds SIP is an investment platform that helps individuals with financial planning and supports them in reaching their respective financial goals. Contact us today to know more!
– Pooja Patel, CFP CM