A systematic Investment Plan or SIP is an instrument for investing in Mutual Funds. SIP allows debiting the fund from a savings account and credit that in a Mutual Fund automatically with certain intervals like weekly, monthly, and quarterly. SIP Calculator is a tool that allows you to estimate the growth of your investment through SIP. The step-up SIP Calculator can measure returns if you want to increase your investment per year.
Measuring returns of SIP using the Step-Up SIP Calculator is easy. You just need to fill out some mandatory fields such as monthly contribution, maturity, and expected rate of return. If you wish to increase a certain percentage of investment each year, then fill the 'Increase Contribution/ Year' field. Once you filled in all inputs, click on the 'Calculate Now' button to get the result. The result includes expected profit, expected return, growth table, and a growth chart.
SIP is an investment instrument for mutual funds. You can invest in Mutual Funds in two ways, either invest in lumpsum or invest using SIP. SIP carries multiple benefits over lumpsum investment. Those are:
With a one-time mandate (OTM), you can start a SIP. You can increase or decrease the amount of SIP anytime. If you have a temporary shortage of money, you are allowed to pause it. Multiple SIPs over a single Mutual Fund are also allowed.
Recurring investments are great for wealth creation. This kind of instrument increases your discipline in investment. If you stated SIP, your savings account must have that amount for auto-debit. In the case of failure of SIP, the bank and the Mutual Fund vendor will charge a penalty unless you cancel it. So, you are in-force to invest regularly. This is not a bad thing at all. Eventually, it will make you more cautious about your investments.
SIPs mainly invest in the stock market through market sessions. At the end of the market session, all cost of purchase units is average out. This is called Rupee-Cost Averaging. Due to the nature of this investment, market volatility does not affect it very much. In the long run, SIPs can produce a corpus that is better than a lumpsum investment.
Do you want to know how to automate SIP online? If you have a net-banking-enabled savings bank account, you can start SIP online. Make sure your PAN (Permanent Account Number) is KYC compliant. If your PAN does not have KYC compliance, you might approach to Mutual Fund provider once. Here is the step to start a SIP online:
Once you have done these steps, your SIP is ready to auto-debit the amount from your savings account. You can cancel it from your net banking anytime.
Also Read: How to automate i-SIP payment with SBI internet-banking?