A SIP calculator is an essential financial tool for planning your mutual fund investments and projecting returns from your investments. While basic SIP calculators estimate the value of your SIPs over the investment tenure, the best ones also go a step further with advanced features. This article highlights the features you should look for to find the best SIP calculator that suits your needs.
Choosing the best SIP calculator for your needs
If you’re wondering how to choose the best SIP calculator for your needs, keep the following parameters in mind:
Look for a user-friendly interface
Ideally, you shouldn’t have to be tech-savvy to use a SIP calculator. A good SIP calculator should fit your user needs. It should have a simple interface with easy to fill input options for monthly investment, expected return rate, and investment tenure so that both seasoned and novice investors can use it with ease.
Choose one with customisable inputs
Since financial goals and market conditions are constantly evolving, you need to find a SIP calculator that allows you to customise inputs to meet your changing needs. The best SIP calculators let you alter the investment amount, tenure, and expected returns rate to see how your corpus growth can vary. You can use this tool to run multiple simulations to find the right investment parameters to suit your needs. For instance, you want to invest in mutual funds to fund the down payment on your home. You can use the SIP calculator to estimate returns assuming varying timelines, let’s say, 3 and 5 years and see which option suits your needs. Other than that, you can also use the calculator tool to compare funds with different past return rates to choose one that best aligns with your realistic return expectations and risk appetite.
Check for goal-based planning features
If you’re unsure about how much to invest via SIPs, look for a goal-based SIP calculator. Whether you wish to purchase a gadget from an online marketplaces or plan your retirement, SIP calculators can help you undertake goal-based planning. These tools allow you to set a target amount for a specific goal, like higher education or retirement, and select the corresponding investment duration at an expected returns rate. The calculator uses these parameters to estimate the monthly contributions you need to make to reach the goal. Goal-based planning helps you understand how much you need to set aside every month for a particular goal and tailor your investments in keeping with these objectives.
Opt for a calculator that sums up data with graphs
Visual tools like graphs make it easier to interpret complex financial data. If you need help understanding return breakdowns, choose a SIP calculator that displays returns estimates using graphs and other visual aids. These calculators demonstrate the year-on-year progress, investment and return estimates, and more to help you better visualise your returns. SIP calculators with graphical representations make complex data easier to understand, especially for novices who are just starting out.
Select calculators with a step-up feature
If you anticipate annual income increase in the coming years, choose a calculator that can help you plan your SIPs accordingly. SIP calculators with a step-up feature allow you to understand how gradually increasing your SIP installments can lead to a higher wealth corpus over time. You can use these calculators to strategically hike your investments by a certain percentage or amount annually to ensure that your increased income is used to make more money.
Pick a calculator from a reliable source
When you are choosing a SIP calculator to suit your needs, make sure it comes from a reliable source. Choosing SIP calculators from top mutual fund houses, leading NBFC s, and banks ensures that the return projections are accurate and realistic.
Conclusion
Choosing the right SIP calculator for your needs can help you draft a tailored approach to investing. While assessing various calculator tools, you can focus on finding one that offers a user-friendly interface, allows goal-based planning, and step-up features to streamline investment planning. Additionally, picking SIP calculators from reputed sources that offer you the flexibility of running multiple simulations can help ensure accurate returns projection and informed decision-making.