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Sip Interest Calculator For Your Plan

By Author: Jignesh Shah
Total Articles: 8

Systematic Investment Plan is commonly referred to as SIP, an easy and effective way to make your money grow without putting too many efforts. All you need to do is invest a fixed amount of money, which is convenient for you to put into a SIP scheme at fixed intervals. When such small instalments get accrued in one scheme over time, they can give back rich rewards to the investor. Investors make use of SIP interest calculator to get a rough idea of how much money they would get after a certain time period and reach their investment goals.

SIP doesn’t just set aside the money for you but invests that money in profitable ventures and businesses. Like any other profitable businesses, the money you invest keeps growing, and when the investment matures, you get a neat sum of money back on your investment. This is how SIP works, and there are different types of SIPs that can help the investors amass substantial financial gains. All they need to do is invest in the right kind of SIPs after looking at the performance and calculating profitable sum from SIP interest calculator. SIP is the safest choice out there for investment, and one will come across several types of SIPs in the market.

Different kinds of SIPs
As an investment, it is essential for you to understand what exactly you are looking for in your investment, the time period involved and the financial purpose behind it. Based on your needs, you can pick the right SIP for you, but firstly, you must understand the different kinds of Systematic Investment Plans available in the market.

Top-up plan- The Top-up SIP plan allows you to boost your investment periodically. One can increase their income by increasing their investment amount at certain intervals in some well-performing schemes.

Perpetual Plan – The Perpetual plan SIPs are typically fixed for a time period of one, three, or five years. As there is no end date mentioned in the SIP scheme, it is known as Perpetual SIP. It means that one can transfer their funds whenever needed or when one has reached their financial goals.

Flexible Plan- Flexible SIP allows one to be flexible about their investments. It means that one can skip the investment due to any cash crunch or some other reasons. When you pay extra or invest big, you get a bonus for your contribution.

Trigger Plan- Trigger SIP is just perfect for those investors who are new to the field and carry limited knowledge of investing and the financial market. You can set the SIP start date, index level, and NAV to get begin with, and it is a good option for the newer investors looking for some training in the market speculations.

The stock markets can be unpredictable. It sure can be challenging to understand as to when and which SIP scheme to invest. Kotak has some good plans for SIP and another good option for the investors is to use SIP interest calculator to get some sense of direction. The online tool can help the investor to calculate the expected returns on their investment and will help decide whether the investor should invest in a specific plan or not.

Calculating SIP interest
Here are a couple of ways used by an investor to calculate the SIP interest for the plan.

Point-to-point return- Also known as absolute return, one needs to enter the initial and the ending net asset value of the scheme to calculate the SIP interest.

Simple annual return - Many investors prefer to calculate the SIP interest on SIP interest calculator for a holding period less than a year or 12 months. One needs to get the real picture by annualising the returns and to know the effective annual yield.

Compounded annual growth rate – Also known as CAGR, it is a better way to calculate SIP interest rate and depict returns on the investment. Those numbers reflect how the investment would grow if it generates a steady return. However, the actual results may differ as the CAGR represents a mean annual growth rate.

XIRR function for SIP interests - XIRR is a function in Excel that calculates annualized yield and internal rate of return at irregular intervals. XIRR is simple and easy to use SIP interest calculator and doesn't even need any NAV.

The calculations on SIP interest gives one a fairly good idea on as to where to invest and for what amount and time. For example, you might have a plan to fund your child’s higher education. Well, with SIP schemes, you can plan early and start working towards fulfilling your financial goals. Every parent aims to give the best possible education to their child, and the education is getting expensive day-by-day every year. It would be unfair for the child not to be able to get admission in the college of his choice not because of his merit but because of the shortage of funds or financial crisis. And, if you plan to send your child abroad for higher studies, it can cost more than 20 lac INR every year. The solution lies in thinking smartly and acting wisely. Thus, take advantage of the SIPs and shift away from the traditional ways of investment. Use the interest calculator for SIP and take advantage of several SIP schemes running with reputed firms like Kotak to make the right start in life.

SIP investment is indeed a smart and convenient move which gives one the chance to achieve financial security in longer terms. Moreover, anyone can start with a SIP planner anytime, and they need not have any prior experience with investments and finance. Picking the right SIP plan ensures not only financial rewards but also trains one to become disciplined in their investment habits. The systematic investment plan will set aside the money you invest in money-making businesses and share their profits with you. Thus, you can be sure of making handsome earning on your investments and watch them grow in the long run. The investors get complete freedom of making a higher or lower investment, pause the plan, or maximize their earnings anytime.

The author is a financial advisor with a leading financial firm. She expresses her opinion on various investment schemes through blogs and articles. You can read the article to know how you can plan your investment with SIP interest calculator.

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