What is SIP Calculator? How does it Work?

Want to invest your savings so as to two-fold your income? Tons of investment destinations have popped up nowadays. Yet, mutual funds investment plans serve the ideal purpose. Now the question is – are you ready to invest a lump-sum? Or want to invest in intervals? If the later is your choice then SIP or the Systematic Investment Plan works the best.

SIP allows investors to invest in mutual funds that too in a systematic way. Such an approach resists the risk associated with the investments made to the equity funds, without even compromising in the returns. It serves the best investment plan with high returns in India. Now, what the role SIP calculator plays in this context?

An insight into SIP mutual funds investment plans.


What is SIP Calculator?

SIP calculator, unlike other mathematical calculators, allow the users to estimate the return amount that is going to be met by investing small amounts in SIP at regular intervals over a long period of time.

Well, this calculation may certainly be an approximate one. You can never stick to the figures you calculated. However, you can inexorably predict your outcome to some extent. Based on this estimate, the potential investor may even create his own financial plan for a long-term objective. Say, for example, a retirement plan. Surely, balanced funds are appropriate for the retirement or long-term purpose, but SIP also works in a parallel manner. In a whole, the investors are likely to make investments in order to reach the required corpus.

How does SIP Calculator Works? Or better if we say, how can an investor make use of the SIP calculator?

SIP calculator or SIP investment computer make use of the important data or advanced investment strategies to calculate the absolute value of the investment. Till now, we all are too much familiar with the definition of SIP calculator. But do you know how it actually works?

Here we have stacked down some important steps that if followed can govern you to compute the approximate amount.

Step1: Initially, the investor needs to enter the principal amount of investment that he or she desires to invest in a monthly basis. It can be either an investment of minimum Rs 500 or it can even be the scheme to invest with Rs 1000 minimum.

Step2: Secondly, the step includes the evaluation of the possible rate of return on the investment.

Step3: The third step involves the tenure of investment. For every investor, figuring out the time period of the investment is very important. This helps you to determine the period they want to stay invested. Generally, the minimum time period in a SIP is for 6 months. Whatever it may be, SIP serves the best investment plan with high returns in India.

There are some cool ways to make your mighty investment plans. But before committing to any investment strategies, it is crucial to check out your returns on a SIP calculator online. You can change the variables according to your wish and evaluate the estimate of the returns that can be earned on your principal amount.

Balanced Funds For Retirement – What are its Pros and Cons?

Are you ready with your retirement plans? Standing at the doorstep of your retirement and planning for something productive is completely frivolous. However, if you start planning from today no one can cease you from enjoying your retired life.

So, what are your retirement investment plans?

A balanced fund is one of the best alternatives for intermediate-term investors, specially made for the retirement. Balanced funds or hybrid funds deal with money that is spread across a diversified portfolio of stocks and bonds. Most often it actually specifies an allocation of about 60% stocks and 40% bonds and sticks closely to that allocation itself. Such a moderate risk approach are truly suitable for those in and near retirement.

Let us check out the pros and cons associated with these hybrid funds.

Pros of Hybrid Funds

1. Balanced funds allow the investors to own one fund that automatically selects the underlying stock and bond investments for you. There is no need for you to select a stock fund and a bond fund individually.
   
   
2. A balanced fund is one of the best mutual fund investment plans if you are planning for retirement. Hence, since the mutual fund advisors or the management team itself will take the responsibility, you are free from dealing with any such headaches. The experts or better if we say, the financial advisors are in charge of selecting the right partner undergoing advanced market research, monitor your investments, and make improvements whenever necessary. You just have to choose from the risk-based recommendations they offer and invest your saving to earn high in the end.
   
   
3. Just like SIP (Systematic Investment Plan), Balanced Funds grant you an option of investing smaller amounts in a periodic manner. You don't have to pay a lump sum. Just a minimum amount will help you to purchase happiness for the whole retired life.
   
   

Cons of Hybrid Fund

1. There are times when the fees in a balanced fund is a bit higher relative to the index funds. This is completely owing to the responsibility of the fund management team.
   
   
2. Since the financial management team has the complete responsibility, you don't have any option to make your own choices regarding the type of stocks such as international, small cap, large cap, or regarding the type of bonds such as government, corporate or high yields.
   
   
3. While your portfolio size enhances during your accumulation phase, if you have investments across multiple accounts it may make sense to find certain investment types like bonds within tax-deferred retirement accounts, stocks within the non-retirement brokerage accounts. Such an approach is not possible if you are investing in balanced funds.
   
   
4. Now reaching the retirement phase, if you are holding a large portfolio size and multiple accounts you have the option of using a bond ladder. This is again not possible if you are planning to spend money on the balanced fund.

So, what are your plans today? Will you go for balanced funds or simply shift to any other investment portfolios? Whatever may be your decision, work ASAP. Talk to your financial advisors. They will present you a distilled clear version of mutual fund investment plans with a complete financial strategy.