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The most important feature of SIP investment plan is the power of compounding which exhibits how time exerts the greatest influence on one’s investment portfolio than any other force. Through the power of compounding, a small amount of money invested over time can grow into a remarkable capital, as with the compounding benefit “interest earns interest” results in wealth creation. The SIP investments, wherein the investors have to park a small amount of money at a regular interval, provide an opportunity to gain the compounding benefit. We can plan our SIPs using the SIP calculator which showcases the impact of the compounding power very keenly. We must use the same to know the accurate results. Let’s understand the power of compounding with an example here.
An investor made two investments one offering simple interest at the rate of 10% while the other in SIP offering compound interest at the rate of 10% again. The invested amount for both is Rs.1,00,000. After ten years, the simple interest will give an appraised value of investments which amounts to Rs.2,00,000 after ten years. On the flip side, SIP investment offers a high value amounting to Rs.270,704.15. The compound interest on the SIP investments is earned every month, i.e., the compound interest frequency is monthly with which a higher value is accumulated. This way, the power of compounding helps the investor in gaining commendable money growth over time. Longer the period of investment, higher the creation of wealth.
The SIP returns calculator helps in computing the net worth of invested capital after a certain period of time keeping the inflation factors in consideration. One can easily put the values in the online calculator and ascertain an accurate amount for further planning. Moreover, one can also calculate the monthly amount of investment as well to achieve a pre-defined capital in the future. The SIP planner is truly a helping tool for every mutual fund investor.
Features of SIP Calculator:
The primary traits that make the mutual fund returns calculator a preferable choice include the following:
A. Keeps the inflation rate in consideration: As we know that the inflation is touching sky high, it has become essential to consider the net present value concept and inflation rates while calculating future returns. The SIP calculator is designed keeping the same perspective in mind. This tool generates the results after considering the current and expected inflation rates to generate the returns on SIP.
B. Generates accurate results: The results generated by the SIP planner are accurate, and the reason being is that it is designed after evaluating various concepts related to IRR, i.e., internal rate of return, NPV, i.e., net present value and compound rate of interest. It asks for majorly three factors, one being the invested amount per month, the expected rate of returns and the tenure of your investment, and in the results computes an exact amount of money.
C. Saves time and cost: The SIP calculator is available online and free of cost. One can utilise the same anytime anywhere to make a better plan for SIP investment. Moreover, there is no extra cost for using this online which makes it a cost-efficient solution for investment planning.
Hence, the investors seeking investment in the mutual fund SIP and want to know their returns prior to investing must use the best features of SIP returns calculator. MySIPonline provides the online solution for the same; you can visit them and avail their free investing solutions for the purpose of making a worthwhile investment in mutual funds.