SIPs help you build wealth steadily
In India, mutual funds are now pretty much in vogue ! The strong performance of the Indian stock market in the past few years has led a whole bunch of first time investors to consider the equity market for investments. Mutual Funds (despite the market risk) are popular instruments for equity /debt investments especially among investors who want to benefit from the stock or bond market but are unable to research or track the market on their own.
Need for Mutual Fund SIP Calculators
Most investors prefer the Systemic Investment Plan (SIP) route for investing in mutual funds. SIPs work pretty much like recurring deposits. Investors invest a fixed amount monthly in a fund for a certain period of time. The fund house , on behalf of the investor invests the money in the market. The gains/ losses depend on how well the investment works out.
There are 3 factors that help us estimate how much wealth we can accumulate by the end of the investment period:
- SIP Amount : Investment amount every month
- Period of Investment: Total months/years for which the investor pays SIP amount
- Annual rate of return: Annual gains that the fund can provide.
We need to remember that annual rate of return in mutual funds isn’t fixed. It depends on market performance & are subject to market risks. Thus at the time of investment it’s important to set expectations right & evaluate the various return scenarios.
It’s a bit complicated & thus the need for a scenario based Mutual fund return Calculator. I created the below calculator to address the need.
SIP based Mutual Fund Return Calculator
Edit the “SIP amount” and/or “investment tenure” fields and check the table below to understand how systemic investment plans(SIPs) can help you accumulate wealth.