Just relying on your primary source of income is not a good idea nowadays. Investing your buck in the right manner is essential, and in India, a SIP (Systematic Investment Plan) is considered a very gainful investment due to the high SIP interest rate offered.
Investments and savings play an essential role in one’s life, helping one build wealth at the right time. However, always remember that idle money in the bank account or even locker is a lost opportunity for growth.
What is a SIP?
SIP or Systematic Investment Plan is a financial investment scheme offered by mutual funds to allow investors to invest a fixed amount at regular intervals instead of a lump sum. These regular intervals are weekly, monthly or quarterly.
Here, the investment is typically made into a mutual fund scheme, which pools the money from different investors to invest in a diversified portfolio of assets such as bonds, stocks etc. Moreover, the interest rate in this investment is quite appealing. Therefore, this investment plan helps the investors to average out the cost of their investments and reduce the market volatility impact on their investments.
What are the advantages of investing in SIP?
A SIP allows investors to start with small amounts and gradually increase the investment amount as their income grows.
● Higher ROI
Compared to fixed or recurring deposits, which are the traditional investment methods, SIP provides quite lucrative terms as the SIP interest rate is attractive in our country.
● Emergency funds
It is an open-ended fund without a fixed tenure. This enables the investor to withdraw it as a contingent fund and helps during emergencies.
● Low initial investment
One can even start a SIP investment with just Rs 500 per month. This is an affordable way to create wealth in the long run without hurting your wallet.
What is a SIP interest calculator?
It is a tool that helps individuals to calculate the returns on their investments made through a SIP. The factors that are taken into consideration for this tool are the amount invested, the frequency of investment, and the expected rate of return.
Further, after you enter these mandatory numbers, it provides an estimate of the total returns that can be earned over a specified period of time.
These calculators are readily available on your smartphone if you use the right application. In my personal experience, I use the Bajaj Finserv application, which offers various calculators, including this one.
Moreover, one can also invest in SIP on this application because, compared to what is offered in the market, it gives the best interest rate.
(Note: The readers are free to use any application as this content is not promotional.)
Before depositing your money into any investment instrument, it is important to know that you’ll be reaping from it. So, using a SIP interest calculator is a mandatory step nowadays. This is because the financial goals of an individual’s life are set, and to achieve them, proper planning and execution need to be in place.