When one starts taking an insight into the world of mutual funds it doesn’t take time for him to acknowledge the term SIP and SIP Calculator but what exactly are they? What is SIP is the question on everyone’s mind even by the investors who have been investing for a long time. So, here’s the guide on to how using these SIP plans you can achieve your goal to financial success.
What is SIP?
SIP or Systematic Investment Plan is a financial tool that helps to create wealth by enabling an investor to invest fixed amount regularly (weekly, monthly, quarterly) in a mutual fund scheme. Since here the investing is done in regular intervals the amount of risk associated to market instability is reduced effectively. Below is the list of “Best SIP to invest in 2018”.
Top Equity Fund to invest in 2018
SBI Blue Chip Fund
SBI Small Cap Fund
L&T Midcap Fund
ICICI Prudential Focus Bluechip Fund
Reliance Small Cap Fund
Aditya Birla SL Frontline Equity Fund
Top Debt Fund to invest in 2018
Tata Dynamic Bond Fund
SBI Corporate Bond Fund
ICICI Prudential Long Term Fund
Franklin India Dynamic Accrual Fund
Aditya Birla Sun Life Short Term Fund
L&T Short Term Income Fund
Top Balanced Fund to invest in 2018
HDFC Balanced Fund
ICICI Prudential Balanced Fund
SBI Magnum Balanced Fund
Aditya Birla Sun Life '95 Fund
Principal Balanced Fund
HDFC India Prudence Fund
Top Tax Saving Fund /ELSS Fund to invest in 2018
Tata India Tax Savings Fund
DSP Tax Saver Fund
Reliance Tax Saver Fund
Axis Long Term Equity Fund
IDFC Tax Advantage Fund
Aditya Birla Sun Life Tax Relief ’96 Fund
SIP is type of a recurring deposit for mutual funds with fund houses and brokers promoting this to help people grow their money. The evidence of how much your investment is worth is calculated with the help of an SIP calculator. The difference in recurring deposits and SIP being that in recurring deposit you get a fixed return where in case if sip plans it is dependent on a range of market factors. Benefits of sip investment over lump-sum investments are numerous.
Benefits of SIP over lump-sum investments
- No need to speculate and see for the time of investment in market.
- Power of compounding – small amount invested regularly will result to a larger return.
- You can start with as low as Rs 500 sum of money to invest.
- Automated payments – need not to worry about paying money each month
- Market risk reduced – monthly investment ensures money is not affected by market volatility
You can also customize your SIP. Many fund houses allow investors to invest monthly, bi-monthly and fortnightly. They are step-up SIP’s too which allow an investor to increase the sip amount periodically.
To make things simple, we are here with a sip calculator which you can use to calculate returns on your sip investments.
Steps to use SIP Calculator –
- Enter the amount you are comfortable with investing monthly. Most of the sip plans will start with a minimum of Rs 500 with some varying to Rs1000 a month.
- Estimate the rate of return on your investment
- Enter the period you are willing to invest for. The amount of time you want to continue investing and it ranges from 6 months minimum to 12 with different SIP plans.