Planning and managing financials is important for achieving desired goals. One tool that is extremely useful in this context is the Systematic Investment Planning (SIP) calculator. Apart from highlighting the importance of disciplined investing, this calculator simplifies complex calculations and aids investors in visualising the future value of their investments. Additionally, different types of calculators that factor in various variables are designed to help individuals attain various goals. This article explains the functionality and usefulness of 6 different types of calculators.
Basic SIP Calculator
The most basic and widely used calculator is the Mutual Fund SIP calculator. Individuals can acquire an estimate of the future value of their SIP investments with the help of a SIP calculator. Investors need to enter a few details such as their monthly investment amount, expected annual rate of return and the tenure of the investment. Along with other values, the calculators provide the approximate value that the investments will amount to at the end of the investment duration. It can be used by new and experienced investors who want to see how their investments grow over time.
Goal-Based SIP Calculator
The goal-based SIP calculator allows investors to align their investment amount and duration with their financial goals such as purchasing a property, paying for their child’s education, or building a fund for their retirement. Individuals need to enter values like the final expected amount, the time in which they expect to have the target amount, and the expected rate of return. The calculator provides a value of their monthly SIP that would help them reach their goal amount. Individuals who want to link their SIP investments to tangible outcomes will find this calculator useful.
Step Up SIP Calculator
Investors are commonly advised to increase their SIP contributions as their financial strength increases. For such individuals, a step up SIP calculator can be useful as it allows individuals to factor in the increased amount while calculating the future value of their investments. To use this calculator, investors need to input their initial SIP amount, the percentage increase in the initial SIP amount, and how frequently they plan to increase the amount. This calculator can be used by professionals who want to potentially maximise gains by gradually increasing their SIP amount.
SIP Delay Calculator
In some scenarios, individuals have to delay their SIPs to meet urgent financial needs. In such cases, they can understand the impact of the delay and take necessary steps by using a SIP delay calculator. While the goal of this calculator is to highlight the importance of starting investments early, it compares two scenarios: starting SIP immediately and delaying SIP by a specific time. The SIP delay calculator is useful for individuals who are considering the right time to invest and assists them in understanding the benefits of starting early.
Tax Saving SIP Calculator (ELSS)
Equity Linked Saving Schemes are a type of mutual fund that allows individuals to invest in the equity markets while having the benefits of insurance. Using an ELSS calculator, investors can estimate both the potential gains and the tax benefits they would achieve through their mutual fund investments. This calculator is designed for investors who want to reduce their taxable income under Section 80C of the Income Tax Act and invest in the markets at the same time.
Advanced SIP Calculator with Inflation Adjustment
Inflation has a major impact on the potential gains acquired from various forms of investments. An advanced SIP calculator factors in this effect while calculating the future value of investments. It allows users to enter the expected inflation rate along with the monthly SIP amount and the expected rate of return. This calculator is therefore useful for both beginners and experienced investors as it highlights the real time future value of investments. Additionally, investors can also use these calculators while planning long term goals such as retirement or education.
Conclusion
SIP calculators can be beneficial for individuals investing in mutual funds as they are useful in simplifying investment planning. Moreover, they aid investors in estimating potential gains, setting investment goals, and making informed decisions. From helping individuals who are starting with a small amount to investors who plan to achieve significant milestones, these calculators help all types of investors. Whether it be for adjusting contributions to overcome inflation or saving taxes, SIP calculators like Inflation Adjustment SIP calculator and ELSS calculator can be useful. All these types of calculators including TATA SIP calculator, are available on mutual fund apps or financial websites to simplify future investment value estimation.
