Step-by-Step Guide to Using a SIP Calculator

SIP allows people to invest small regular amounts in mutual funds, making
it affordable and accessible to individuals with modest incomes.

Systematic Investment Plan (SIP) has become a popular choice among investors in India. It allows people to invest small regular amounts in mutual funds, making it affordable and accessible to individuals with modest incomes. Using a SIP calculator, it becomes easier to estimate the returns on these investments over a particular period. This article will provide a step-by-step guide on how to use a step up SIP calculator and make sense of mutual fund investments.

Step 1: Understanding SIP  

Before going ahead with the calculator, it’s crucial to understand what a SIP is. SIP is an investment method where an individual can invest a predetermined sum in mutual funds at regular intervals. It is typically a monthly investment plan, but one can choose a quarterly or yearly plan as well. Step up SIP calculators help in understanding how increasing the SIP amount over time can boost investment value.

Step 2: Finding a Reliable Step Up SIP Calculator

Firstly, users need to locate a reliable online step up SIP calculator. There are multiple online financial websites, such as the Nippon sip calculator. Such tools can help investors calculate the estimated returns on their SIP Investments.

Step 3: Enter SIP Amount

Input your fixed monthly investment in the SIP calculator. For example, if you decide to invest ₹5000 every month, simply type ₹5000 in the given field.

Step 4: Enter the Duration of SIP

Next, enter the time duration for which you will continue investing. This is provided in months or years, depending on the calculator you are using. 

Step 5: Enter the Expected Annual Returns Rate 

After entering the SIP duration, you will need to enter the expected rate of returns. This is usually an estimated percentage, typically ranging between 12%-18% for mutual fund investments in India. 

Step 6: Calculation 

Once you’ve provided all the necessary information, click on ‘Calculate’. The step-up SIP calculator will then provide an approximate amount that you may receive at the end of the investment tenure.

However, please note that these calculators, including the Nippon SIP calculator, provide only estimations based on the data entered. The actual returns might vary based on market conditions.

The step-up SIP calculator is an ideal tool for anyone planning to adjust their SIP amount yearly. This ‘step-up’ method comprises an annual increase in the investment amount, say by 5-10%, depending on the investor’s income and choice.

For instance, if you start with a monthly SIP of ₹5000, and decide to increase the amount by 10% yearly, the monthly SIP investment for the second year would be ₹5500, the third year ₹6050, and so forth. The step-up SIP calculator takes into account this annually increasing investment while calculating the estimated return.

In closing, it’s important to note that mutual fund investments are subject to market risks. Hence the use of tools such as the step-up SIP calculator and the Nippon sip calculator should be for guidance purposes only. 

Disclaimer: While the step-up SIP calculator provides an estimation, investment in mutual funds should be done carefully. The investor should gauge all the pros and cons of trading in the Indian financial market.