Investing is exciting and thrilling, but it can also be scary as well. Many questions may arise in your mind, Let’s say, How much should you invest? For how long? What kind of returns can you expect? Let’s understand this with the help of a simple example.
Imagine your daily commute to the office. You take the same route, spending a fixed amount on travel each day. This consistent travel takes you closer to your destination – your workplace.
Now, think of this daily travel as the regular SIPs you invest in. Just like daily commutation helps you reach your destination “the workplace”, Similarly, the SIP helps you achieve your financial destination with regular efforts and without a big dent in your pockets.
But how do you know how much to invest and how long it will take to reach your goals? That’s where the SIP calculator comes in – your personal GPS app to guide you on the road to financial success! Just like the map app on your phone that helps you to navigate your daily commute and makes reaching your destination easier, the SIP calculator helps you in a very similar manner.
This blog post will simplify this very tool for you so that you can make your financial planning journey easy and effective.
SIP Calculator – What is it?
As mentioned above, to reach your goal you need a tool that can help you navigate through the roads to reach your destination. That tool is a Systematic Investment Plan(SIP) calculator, which helps you estimate your final destination, based on the distance you travel that is the SIP you do.
Since SIP is a trendy choice among individuals who are new to investing and have limited capital, the SIP calculator is a very useful tool for them to calculate their ideal corpus. SIPs are ideal for long-term investment goals. By investing regularly and benefiting from compounding, SIPs can help you accumulate a significant corpus over time.
How can a SIP Calculator be beneficial for you?
SIP calculator is like your own personal financial wizard, that helps you in assisting with goal setting, tracking progress, and understanding how SIPs can work for you. It is a simple and no-cost tool to help you begin your path towards a successful financial future!
- SIPs explained simply: If you’re new to SIPs (Systematic Investment Plans), the calculator can break it down for you. It’s like setting up a small, regular automatic payment towards your goals. The calculator shows you how these small amounts can become a big sum over time.
- Goal planning made fun: Let’s say you want a new phone in a year. You can enter the phone’s price and how much you can save each month. The calculator will show you if you’ll have enough by then! This works for bigger goals too, like a dream vacation in 5 years.
- See your money multiply: The calculator shows the magic of compound interest. Imagine growing a small seed into a giant tree. That’s what happens to your money over time when you invest regularly. The calculator shows this growth, making saving seem super rewarding!
How to do SIP calculators work?
The SIP calculator uses a formula to estimate the future value of your investments, considering regular contributions and compound interest. While it might seem complex, it can be broken down into simpler steps. Here’s how it works:
The Formula:
The most common formula used in SIP calculators is:
Future Value (FV) = P × ((1 + i)^n – 1) / i × (1 + i)
Let’s break it down:
- FV: This represents the total amount you’ll have at the end (future value).
- P: This is your monthly SIP investment amount (the seed you plant).
- i: This is the periodic rate of interest (like sunlight and water for growth). It’s usually the expected annual return divided by the number of investment periods in a year (monthly = annual rate / 12).
- n: This is the total number of investment periods (the time you give your seed to grow). It’s the total number of months or years you’ll invest for.
The formula above is provided for clarity purposes only, as it is not necessary to use it in practice. An online sip calculator, like the one on BFC Capital’s website, can be easily used to determine your financial future.
How to use BFC Capital’s SIP Calculator?
Since we have talked so much about SIP calculators above you might be wondering where you can find one. Well, fret no more! BFC Capital’s SIP calculator is here to be your financial fortune teller.
Go to BFC Capital’s website, and under the Planning & Solutions option select SIP Calculator.
Simply input the monthly invested amount you want your SIP to start with, along with the number of years you plan to invest and the expected rate of return.
And there you have it! The calculator will reveal the prospective future amount of your saved money.
Advantages of using BFC Capital’s SIP Calculator
BFC Capital’s SIP calculator goes beyond a simple estimate. It becomes a valuable tool for planning your financial future with clarity and confidence. Following are a few of its advantages:
- Our calculator has a very simple and user-friendly interface, making it simple to navigate for all users, regardless of financial expertise.
- The SIP calculator helps you derive precise outcomes and avoid the hassle of manual calculations.
Conclusion
The SIP calculator may not be magical, but it’s almost like magic when it comes to planning your future financials! Consider it as your powerful assistant, helping you see how much your savings can grow over time. Simply provide information about your goals, and the tool will provide you with an approximate idea of your potential future savings. Guessing is no longer necessary! It’s akin to possessing a hidden asset to achieve your financial aspirations, whether they be grand or modest. Stop being confused and begin your path to financial independence by using our reliable SIP calculator. Save with joy!
Please share your thoughts on this post by leaving a reply in the comments section.
Also, check out our recent post on “PPF, NPS, ELSS, and ULIPS: Where to Invest for Tax Benefits?”
To learn more about mutual funds, contact us via Phone, WhatsApp, Email, or visit our Website. Additionally, you can download the Prodigy Pro app to start investing today!
Disclaimer – This article is for educational purposes only and by no means intends to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the scheme related document carefully before investing.
