Don't wish to park your one-time investment in Mutual Funds? Not to worry, go for SIP then. As Systematic Investment Plan is an investment method for investing a fixed amount, regularly in a designated mutual fund scheme. SIP allows the investors to engage in buying units of a particular scheme each month, so that one can execute a saving plan for themselves.
The main benefit of SIP is that it doesn't necessitate for timing the market. When it comes to timing the market, one may lose out the larger rally or withdraw while markets were performing well or may appear at a wrong time when either valuation is at peak or markets are in a declining stage. Instead, to 'time' the market, ensure that investment would be made when the markets are 'high' and 'low' in order to make the most from the market which at times could be difficult to estimate in advance.
So, you have planned to take SIP, use SIP Return Calculator, a financial online tool which assists you in determining the returns that can be generated after a stipulated period of time. Moreover, comparative analysis can also be made for several types of mutual funds on the basis of knowledge, research, and consultation. Let's examine how does mutual fund SIP Return Calculator works:
Case 1
Suppose you want to earn an extra income on your current salary but don't know which scheme to invest in that gives you potential returns. In order to maximize your particular objective, you plan to consult your financial advisor who advises you to select Monthly Income Plan of a particular mutual fund house.
Once you have discussed your financial goal with your financial advisor, you finally decided to take SIP of ₹5000 every month for 10 years time period which offers you an expected rate of return at 9% per annum. After entering the details in your SIP Return Calculator, the results will be obtained as below:
Inputs in your SIP Return Calculator
Total SIP Amount invested : ₹ 5,000 per month
Time period: 10 years
Expected Rate of Return: 9%
Once you enter the above values in your Mutual Fund Return Calculator, the results will be seen as follows:
Your Investment Amount : ₹ 6,00,000 ( i.e. ₹5000 per month for 10 years)
Maturity Amount : ₹ 14,20,418
Earning on your Investment : ₹ 8,20,418
Case 2
Mr. Manoj is a working professional in a Software Company in Noida who is 28 years of age wishes to retire by 57 years. He plans to choose SIP where he wishes to choose his retirement comfortably. His financial advisor has requested him to invest in a Retirement Mutual Fund so that he can get impeccable returns in order to make the most of his living expenses. He finally wishes to invest ₹30,000 in SIP in a retirement mutual fund. Late on, he wanted to determine the estimates on how his investment can be able to offer him assured returns. So, he finally decided to enter the details in Mutual Fund SIP Calculator in order to ascertain the following details:
Inputs in your Mutual Fund SIP Return Calculator
Total SIP Amount invested : ₹30,000 per month
Time period: 30 years
Expected Rate of Return: 12%
Once you enter the above values in your Mutual Fund Calculator, the results will be seen as follows:
Your Investment Amount : ₹1,08,00,000 ( i.e. ₹25000 per month for 30 years)
Maturity Amount : ₹ 1,07,85,572
Earning on your Investment : ₹ 1,04,25,572
Now, let's summarize the entire spectrum after assessment of their situation:
Case 1
Financial Goals : Additional Income
SIP amount (per month): ₹5,000
Time (in years): 10
Expected Rate of Return(Future Value in %): 9% p.a.
Final Maturity Value(the final amount obtained) : ₹ 14,20,418
Case 2
Financial Goals : Retirement
SIP amount (per month): ₹30,000
Time (in years): 30
Expected Rate of Return(Future Value in %): 12%
Final Maturity Value(the final amount obtained) : ₹14,20,418
Disclaimer: Mutual Fund Investments are subject to market risks, read all scheme related documents carefully before investing.
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