In the current market, mutual funds are one of the most attractive investment products available for small investors. They offer the ability to invest in the smallest possible fractions and nominal amounts, making the money market accessible to all. Now, when we look at different investment options, most advisors suggest using SIP (systematic investment plan) for long-term returns.
But there are so many funds out there, and you can invest any amount of money as a one-time or SIP investment. How would you assess which fund is worth investing in, how much and what are the projected returns. Unless you are highly proficient in Math or have extensive fundamental analysis tools, SIP calculators are your next best option.
Here are some benefits of using SIP calculators apart from the obvious
- Making an informed decision: We often compare mutual funds primarily based on the annualised returns, expense ratios and exit loads. Additionally, we might look into the market sector and debt composition. But, most high-performance funds look very similar to each other. By using a SIP calculator, you can compare the long-term returns for each of them. You can set your all SIP amount, duration and assess the yield results for each. And pick the one that meets our investment goals.
- Systematic analysis and financial planning: Whether you are using mutual fund investments as a passive income source, or for long-term investments, financial planning is important. If you are considering SIP investments, you will have to budget your monthly investments (as compared to a one-time investment). Moreover, it would enable you to simulate your returns and duration of investments towards the goal without any complex calculations. Therefore, allowing you as an investor to do some basic systematic analysis and plan your investments effectively.
- User friendly interactions are key: For most average investors, understanding the financial and accounting jargon is a hassle. Running those complex pricing models or understanding the projection curves isn’t everyone’s cup of tea. A SIP calculator gives you the power to seamlessly calculate your return projections, investment plans and monthly amounts with a button click. And the user-friendly and intuitive interface gives you instantaneous results, especially when comparing multiple assets.
- Personalization is its best feature: No two investors think alike, and neither are their trading strategies or investment goals the same. Then why should you rely on generic forecasts and calculations when you can personalise and augment them to your specific needs.
The penultimate goal of a SIP calculator is to enable investors to invest with the best available information. Most calculators allow the users to change the SIP amounts to the most granular level of the currency. They can forecast the returns from a single week to as far as a few years. And analyse how changing each of these affects their overall investment for different assets.
There are numerous platforms and tools out there that you can play around and invest in mutual funds easily. You can use them across different devices, be it your desktop or your mobile phone. With the growing markets and increasing investors, you have the power to make the best out of it.