Prospective investors often mistake SIPs (Systematic Investment Plans) for mutual funds, but they are not the same. SIPs are simply a method of investing in mutual funds, with the alternative being a lump-sum investment. A SIP calculator is a helpful tool that estimates the potential returns when investing through this method. A Systematic Investment Plan involves investing a fixed amount of money in mutual funds at regular intervals, such as weekly, monthly, or quarterly. This disciplined approach makes mutual fund investment more accessible and manageable for investors.
A Systematic Investment Plan (SIP) calculator is a straightforward tool that helps individuals estimate the potential returns on their mutual fund investments made via SIP. In recent times, SIP investments in mutual funds have gained immense popularity, particularly among millennials. These SIP calculators are designed to provide potential investors with an approximate idea of the returns they can expect from their investments. However, it is essential to note that the actual returns from a mutual fund scheme may vary due to several factors. Additionally, the SIP calculator does not account for aspects like exit load or expense ratio (if applicable). By using this calculator, you can estimate the wealth accumulation and expected returns for your monthly SIP contributions. It provides a rough approximation of the maturity amount for your investment, based on an assumed annual return rate.
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