Systematic Investment Plan – SIP
A SIP is an investment plan that is performed in a systematic approach for the purpose of saving money through investments that the people make. They look forward to accumulating a larger sum of money after the capital that they put in has appreciated through a period of time which is known as the tenure or term of the investment plan. An investor can invest into the pre-determined mutual funds regularly with interval options of weekly, monthly, quarterly, etc. The investor has the freedom and the liberty to choose the mode of payment according to their convenience and wants. The deposit into the SIP is supposed to be made at regular intervals until the tenure of the systematic investment plan ends. The investor will invest into the SIP as per their needs, keeping in mind the goals that they want to achieve by investing in SIP.
A Systematic Investment Plan will allow a person to invest into Systematic Investment Plan mutual funds with their fund money so that they are able to accrue a large sum through a period of time. This period of time is usually long – term in case of SIP. It is long – term plan for the purpose of fulfilment of your needs which might require the accruement of money over a long period of time so that a good amount of money can be collected to fulfil your goals and desired in the future years to come, these goals and desires can range from anything that you want or your family wants.
Auto – Debit
After you have started investing into the systematic investment plan, you need to keep making investment payments at regular intervals for the entire tenure of the SIP plan. The total amount of the investment money that the investor needs to pay for that particular quarter or month or year can be auto-debited from their bank account and be invested into the SIP plan. This can be done by informing the bank that the investor will pay through the account of to make the debit. This allows for the investor to be tension free and eliminates the fear of forgetting to make the payments and the danger of the lapse of the systematic investment plan. The payments will be processed at the regular intervals that you are supposed to make the investments. The investor is given a certain number of units which are based on the market rate which is called the NAV – net asset value. Every time the money goes into the investment account from your bank, more units of the scheme will be added to your SIP account.
What is a SIP Calculator?
A Systematic Investment Plan Calculator is a calculator that gives the investor or the plan holder with an estimate of the return that they might get for the investments that they have made. This estimate is after a specific term of period that the investor has been investing into the SIP plan. The SIP calculator also helps the investor to decide on the amount of investment in accordance with their requirements of the corpus that they desire to collect by investing into the SIP. Suppose you want to save and accrue money for the education of your child after a period of 10 years. Now, the SIP calculator will help you decide the amount of investments that you need to make so that you can receive a similar corpus amount within the tenure of 10 years of investments. The systematic investment plan calculators are known to have one off the most user friendly interfaces as it only requires the investor to fill up a few variables and little information to be able to get the results accurately and fast.
How to use a SIP calculator?
There are a few steps that one needs to follow when using the systematic investment plan calculator. The SIP calculator will ask you for certain information which it will use to calculate your requirements and results. Below are the steps, make sure you follow them carefully so that the results that you get are accurate:
The SIP calculator will ask you to first input the details of the investments that you want to put into the plan on a monthly basis. You can out in any amount as per your capabilities to pay but there is a minimum amount that you need to adhere to. The minimum amount of money for investment plan is INR. 1000 per month and the minimum amount of money for investing into mutual funds is INR. 500 per month.
Estimation of returns
The next step in the calculation of the SIP is that you have to put in the estimate amount of the return on investments. The estimates have to be taken from the results of the return on investments from the previous few years of the investment fund. A rough estimate is what you can provide the systematic investment plan calculator with.
Term of the investment
The final step of how to use a SIP calculator to get your results if that you need to put in the tenure of the investments. This is case you are using a systematic investment plan maturity calculator. This helps you to decide the term of the investments that you want to keep making the investments for. There is a minimum tenure for the SIP that an investor must adhere to which is a 6 month period. The maximum tenure of the systematic investment plan can be any number of years that you want it to be, as an investor into the plan.
Follow these steps while calculating through the SIP calculator and fill in all the details and information that the calculator asks you in a proper and accurate manner to get the results in an estimated accurate manner, closest to the actual result.