People finish marathons because they persist and train over a long period. The people who ace examinations have worked consistently to achieve what they have. And the same goes for investments. For those investors who prefer low risks and decent returns, Step Up SIP is the best option for investing. The term ‘SIP’ has now been nailed into our brains. Step Up SIP allows you to better control your finances by investing in mutual funds regularly, depending on your financial conditions. These also provide tax advantages. In this article, we will look at the Step Up SIP Calculator, its benefits, and how it works.
What Is A Step Up SIP Calculator?
The most common type of investment is the one where it is done in a lump sum. However, in contrast, SIP enables individuals to invest in a disciplined way wherein a specified amount of money is put in mutual funds at fixed intervals. Step Up SIPs, on the other hand, provide the investors with an option to grow their SIP amount by a fixed sum or a percentage at their discretion at certain intervals. This is the best way to enhance mutual fund investments, which can accompany their increasing income. And therefore, this allows people to achieve their financial goals and objectives without straining their budget.
Benefits Of Using A Step Up SIP Calculator
There are several benefits of using a Step Up SIP calculator that have been outlined below:
- The calculator calculates how much you would be accumulating at the end of the period for a particular policy. This is important since you can not modify or change your Step Up SIP once you have bought it.
- The calculator is fairly simple and quite easy to use.
- The main benefit would be that it is free of cost and also you can use the calculator from any corner of the world.
- Since the calculator is self-explanatory, you would not need much help using it.
How To Use Step Up SIP Calculator?
Step Up SIP Calculator is a free online tool that allows you to calculate the returns from the investments you have made in Step Up SIP funds. Step UP SIP Calculator is a very simple calculator that can be understood quickly.
Here is how you can use the calculator without any issues or difficulty. The calculator works on the following four concepts:
- The “Monthly Investment Amount” field shows the amount of money you desire to be your monthly SIP investment in a mutual fund.
- Then comes the Expected Growth Rate, which is the rate of return you would want to expect from the investments you would be making in mutual funds.
- The length of time is quite important when you invest in a mutual fund.
- And most important is the step-up, which is the annual percentage growth in the value of your SIP investment accumulated over the investment term.
Let us examine this with an example for an easier understanding of the whole concept of the Step Up SIP calculator. You are given an option to choose the percentage of step up. This step-up shows how much your SIP amount rises throughout your investment period. Let us say we take your step Up percentage as 5%, which means you want your investments to grow 5% over time.
In other words, when you invest an amount of Rs. 50,000 in a year in mutual funds, your SIP would have Rs. 55,000 in the second year. And then, for the third year, Rs. 55,000 will be taken as the amount and invested, giving another 5% increase on this amount. Like this, you can make a significant amount over some time.
And thus, like this, you would be able to feel your investments growing with the help of the Step Up SIP calculator, also known as the growing SIP calculator.
Let us now look at how you can use the simple Step Up SIP Calculator.
Step 1- First, you must put in the monthly investment amount you would be contributing to the mutual fund.
Step 2- You have to put the period or the duration of the mutual fund you would be purchasing. This time is the duration till your mutual fund matures.
Step 3- As the last step, enter the interest percentage on the calculator, and you are good to go.
All you have to do now is click on the option ‘Calculate’ and you will be able to see the results in the next few seconds. The results would be having the amount of profit you accrue, estimated returns, a growth table and a growth chart. And therefore, by using the Step Up SIP calculator, you can calculate how much corpus you would be able to build by the end of the mutual fund.
By now, you would have had basic information regarding SIP calculators and the concept of Step Up SIPs. Step Up SIPs are one of the many ways investors like you can invest indirectly in mutual funds. Step Up SIPs have made it possible for most individuals to invest in mutual funds and slowly build their corpus. These SIPs also help ensure that individuals achieve their financial goals and objectives quickly with a disciplined approach. In case of doubts about SIPs or Step Up SIPS and personal loans, consult the financial experts at Piramal Finance.