When it comes to long-term investments, SIP investments are a popular investment option in our country. Moreover, investing in the best mutual funds for SIP nowadays is as easy as ordering food from your smartphone. You just need the right application, and you are more than good to go.
Remember, investors use this investment instrument scheme to build long-term wealth by taking advantage of the power of compounding. Moreover, by investing a fixed amount on a regular basis, investors can benefit from rupee cost averaging and also avoid the temptation to time the market.
What are SIP investments?
It is an investment scheme where a potential investor invests a fixed amount of money at regular intervals (usually monthly) in a mutual fund or exchange-traded fund (ETF).
In this investment scheme, the invested amount is automatically deducted from the bank account of the investor and invested in the chosen mutual fund or ETF. Further, the investor does not have to manually make investments each month, as it is done automatically.
What is a mutual fund calculator?
As the term suggests, it is a tool that helps potential investors determine the potential earnings and growth of their investments in a mutual fund. It allows the investors to input different variables such as the initial investment, expected rate of return, investment duration, and any recurring contributions or withdrawals to estimate the future value of their mutual fund investment.
This tool takes into account the past performance of the mutual fund, fees, expenses, and other factors to offer an estimate of the future returns on the investment. Further, it also helps potential investors to take into consideration what is offered by various financial institutions and then choose the one that suits them the best.
What is the importance of using a mutual fund calculator for your SIP Investments?
1. Helps in setting investment goals
Such calculators help you set realistic investment goals based on your risk tolerance and, most importantly, financial objectives. You can input variables like the investment amount, investment horizon, and expected return rate in order to see the potential future value of your SIP investments.
2. Helps in tracking the investment progress
Such tools allow investors to monitor the progress of SIP investments and see if they are on track to achieving their investment goals. This helps make any required adjustments to your investment strategy to ensure that you are on the right track to achieving your goals.
3. Helps in choosing the best performing mutual funds
As it allows you to compare mutual funds, it lets you choose the one that suits your risk appetite and investment goals. This ultimately enables you to make a wise decision about which mutual fund to invest in through your SIP
Which application is the best to use such a calculator?
Bajaj Finserv, without any doubt. This application is one of the best apps that offer such tools that make investment relatively easy. Moreover, once you know beforehand what you’ll be reaping out of your investment, it gives you a sense of satisfaction and relief.
Therefore, using this tool before investing your hard-earned money is one of the best things you can do as a potential investor.