A Systematic Investment Plan (SIP) is a popular method of investing in mutual funds. As the name suggests, it allows you to invest in a staggered manner, negating the need for lump sums. With a comfortable SIP amount, you can make regular deposits and this is exactly where an SIP Calculator comes in.
This easy-to-use and reliable tool can help you optimise investment planning. It lets you decide your investment terms, such as monthly instalments, horizon, and more, to ensure you get the desired maturity amount.
Read on to learn how the SIP calculator works, how to use it to plan your investment, its benefits, and more.
How Does an SIP Calculator Work?
To use the SIP calculator, you must enter all your investment details to evaluate the potential return at maturity. Here, interest compounding comes into play, and so it uses the following formula:
FV = P X {[(1 + R) N – 1] ÷ R} X (1 + R)
Where,
FV – Future value r amount received at maturity
P – Principal or the monthly investment amount
R – Rate of return expected
N – Number of payments made throughout the tenure
How to Use the SIP Calculator
Learning how to use the SIP calculator is simple, especially with tools like the Bajaj Markets: EMI Calculator App. Here is a quick guide.
Decide on the Investment Amount
With your financial goals as a guide, this tool can help you identify the monthly investment needed to reach them. This way, you can also decide if you need to restructure your budget to meet your goal.
Compare for Right Scheme for an SIP
Based on your expected return rate, maturity amount and monthly investment amount, you can also compare various funds. Since it gives you accurate results on every calculation, you can easily compare multiple options and choose the one with the highest return for your investment plan.
Choose an Investment Tenure
Be it a short—or long-term investment, SIP calculators can help you choose the ideal tenure to reach your goal. To do this, enter all the required details such as the expected returns and the rate of returns you expect. Accordingly, you can tweak the tenure until you find suitable terms.
Choose a Lump Sum Investment Amount
In case you have additional funds and wish to invest them in mutual funds, the Bajaj Markets: EMI Calculator App allows you to draft up SIP for those as well. By entering the lump sum amount and monthly investment in the calculator, you will get your expected terms and return at maturity for the total investment amount.
Advantages of Using an SIP Calculator
Here is a quick overview of all the benefits of using the SIP calculator before investing
- l It allows you to make well-informed decisions for your investment
- l You get the flexibility to find and choose your preferred investment terms
- l Compared to manual calculation, this is a time-effective option
- l It helps you to avoid any errors which are possible during manual calculation
- l This is a free-of-cost tool without any restriction on the number of times you can use it
- l It is available at all time if you have the app downloaded on your smartphone
How to Use the Bajaj Markets: EMI Calculator App for Mutual Funds
Here is the step-by-step guide on how to use the SIP calculator on the Bajaj Markets: EMI Calculator App when planning investments.
l Step 1: Install and launch the Bajaj Markets: EMI Calculator App
l Step 2: Log in with your mobile number, date of birth and generated OTP
l Step 3: Go to the ‘Investment’ tab
l Step 4: Select the ‘Compound Interest Calculator’
l Step 5: Enter your investment amount, number of years you want to invest for, expected rate of return and lumpsum investment (if any)
l Step 6: Click on ‘Calculate Now’
l Step 7: Change the values to compare different scenarios
Thanks to the intuitive interface, using the Bajaj Markets: EMI Calculator App is simple, and this aids holistic investment planning. In addition, you can find other calculators to simplify your financial planning.
These include a loan EMI calculator, insurance premium calculator, fixed deposit calculator, and income tax calculator, to name a few. The Bajaj Markets: EMI Calculator App is your one-stop solution, and you can find suitable terms for a range of financial instruments. Download the app on your smartphone to get started.
