Systametic Investment Plan (SIP) Calculator

SIP which stands for Systematic Investment Plan helps you to build your wealth by investing in mutual funds monthly or quarterly basis over a period of time.

SIP calculator helps you to calculate returns on your SIP investment

SIP Calculator

Systematic Investment Plan (SIP) is a smart and convenient method of investing money in mutual funds. A mutual fund is an investment program which is funded by share holders to purchase securities (Securities here refers to financial instruments like common stocks, bonds, etc).

Systematic Investment Plan is a hassle free way of investment of money, wherein the investor ascertain a pre-determined fixed amount that he/she wishes to be invested towards SIP. The investment has to be made in regular interval of time, depending upon how frequent would the investor like to invest, it could be weekly, monthly or quarterly. This fixed amount of money is debited from the investor’s personal bank account and is invested in specific mutual fund. The recurring payment towards SIP can be set using ECS (Electronic Clearing Services – a payment service usually for small value amount payment from individuals towards big companies or organizations).

For every investment that is made the investor is allocated a number of units which is in accordance with the current net asset value. Net Asset Value is the difference between entity’s assets and liabilities. The investor gets more units when the price is low and fewer units when the price is high. These units are bought at different rates and the investors get benefit from Rupee-Cost Averaging and the Power of Compounding. Rupee cost average allows you to be away from guessing the right time for investment.

“Compound interest is the eighth wonder of the world. He, who understands it, earns it; he who doesn’t, pays it. – Albert Einstein

Very simple to understand, the sooner you make investment, more money you will earn out of it. SIPs are good in long run, as long term investment plan and the best part of it is that the Systematic Investment Plans are flexible. There is no lock in period, one can discontinue when the investor wishes to.

Investment plans are always good and useful in future. SIP’s should be planned according to the goal one has set. The SIPs are disciplined; you know what amount you need to shell out towards investment which helps in planning out the budget. SIP’s are flexible in terms of investment amount too. If the investor wishes to change the investment amount the investor has the option of doing that. The disadvantage with SIP is when the investment amount is fixed; same amount is invested disregards of the market price whether it is low or high.

A Systematic Investment Plan encourages to put your money into savings, which is a good habit. Saving little every month will give you a huge return in long term depending upon the percentage on return.