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SIP Calculator
Plan your future with our SIP calculator. Estimate returns & achieve financial goals through Systematic Investment Plans (SIPs).
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SIP Calculator
The investing information provided on this page is for educational purposes only. AVtalkz does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities, or other investments.
SIP Calculator
- Systematic Investment Plans (SIPs) are a methodical investment strategy used primarily in mutual funds, where investors contribute a fixed sum of money at regular intervals—typically monthly—into a chosen mutual fund scheme.
- This approach allows investors to gradually build their investment portfolio without requiring a large initial capital outlay, making it accessible to individuals with varying financial capacities.
- SIPs benefit from the principles of rupee cost averaging and the power of compounding. Rupee cost averaging helps mitigate the impact of market volatility by purchasing more units when prices are low and fewer units when prices are high, thus averaging out the cost per unit over time.
- The power of compounding further enhances returns as the reinvested earnings generate additional income. SIPs promote financial discipline and long-term wealth creation by encouraging consistent savings and investments, making them a popular choice among investors aiming for systematic wealth accumulation and goal-oriented financial planning.
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Frequently Asked Questions (FAQ's)
- Choose a mutual fund scheme: This is the fund your money will be invested in. There are different types of mutual funds with varying risk profiles.
- Set up your SIP: Decide the amount you want to invest each time and the frequency (monthly, quarterly, etc.).
- Auto-debit: The chosen amount will be automatically deducted from your bank account on the chosen date and invested in the mutual fund scheme.
- Units are allocated: You receive mutual fund units based on the Net Asset Value (NAV) on the investment date. NAV is the price per unit of the mutual fund scheme.
Discipline: Ensures regular investment regardless of market fluctuations.
Rupee-cost averaging: Helps you buy more units when the NAV is low and fewer units when it’s high, potentially balancing the overall cost per unit.
Affordable: You can start with a small amount, making it suitable for beginners.
Convenience: Auto-debit takes care of the investment process.
Mutual funds themselves are regulated, but SIP investments carry market risks.
If you change your bank account, you need to update the new bank details with your mutual fund house to ensure uninterrupted SIP payments. This can typically be done online or by submitting a physical form.