What Are The Various Types Of Sip Calculators?

By Author: SURAAJ
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An SIP is a mode of investment into a mutual fund, in which you can invest a fixed amount periodically and earn returns. When you invest in SIP you get various benefits associated with it like diversification, professional management of by a fund manager, flexibility of investment as well as transparency of your investments. There are different types of SIP calculator available online for you to plan your financial goals when you invest in SIP.
 
In this article we will talk about the types of SIP calculators.
 
What is an SIP calculator?
 
An SIP calculator is a tool that is available online free on the website of most fund houses. You just have to type “free SIP calculator” on your search engine and you will get a number of options. Choose anyone and use it to plan your SIP investment. You will need to fill in certain details into the calculator before you invest in SIP, so that the amount to invest and/or how much your investments will grow in future becomes clear ...
... to you.
 
Types of SIP Calculator
 
Since the financial needs of an investor are different and they have various reasons to invest in SIP, the calculators that are available are also of different types. Let us explore the various types:
 

Target corpus is known: Some financial goals are such that you know the corpus that is required to fund them for example, child’s education, making a home, creating a retirement corpus. There are other calculators available for determining the amount you need to accumulate for these financial goals. Now comes the use of the SIP calculator, where you can specify the corpus, you want to build, the number of years you have to build this corpus, and the rate of returns you are expecting during this time. So based on the asset class you are choosing to invest in SIP, you can specify the return percentage. Based on all this data you provide, the SIP calculator will generate the result of how much you should invest in SIP per period, i.e. monthly, quarterly, half yearly, annually etc., to be able to build up your target corpus.

SIP amount is known: In this scenario, you know how much you can invest in SIP in each period, and you want to know how much you can accumulate by the time you reach a certain age or maybe your child reaches a certain age. Say you have a goal to build a house in the next 5 years and at the current level of earnings there is a certain amount you can invest per month. To know what the value of your SIP contributions should be, you can use this type of SIP calculator.

SIP Top Up: As you advance in your career, your income also increases. This means that the SIP you had started earlier may be too little an amount as per your current earnings. An SIP Top up is a facility in which you can allocate a percentage or a fixed amount, by which your investment in SIP will increase in each period specified by you. The amount you can accumulate over a time period using SIP top up is far more than a plain SIP without top up. The SIP Top Up Calculator helps you determine the amount you can accumulate with top up over a period.

 
Try an online free SIP calculator to plan your investments, and then approach a mutual fund distributor or financial planner to help you choose the appropriate mutual fund in which you can invest in SIP.