While a regular SIP calculator can help you calculate your SIP returns at the end of an investment tenure, a top-up SIP calculator can help you do the same while accounting for a fixed increase in your SIP contributions.
Read on to know all the differences between these two SIP calculators.
What are SIP calculators and what is their purpose?
SIP calculators help you calculate the value of your mutual fund returns. You can use an online SIP calculator to know the value of your mutual fund returns on investing a particular amount in a mutual fund for a fixed investment duration.
SIP calculators are free to use and can be found on the websites of most banks and mutual fund houses.
Using a regular SIP calculator can help you plan your SIP investment and earn high returns. A top-up SIP calculator, on the other hand, helps you increase your SIP contributions by a fixed percentage over time.
How does a top-up SIP calculator differ from a regular SIP calculator?
You must enter different details to know the value of your future returns while using a top-up SIP calculator and a regular SIP calculator. Here are the details you must enter while using a regular SIP calculator –
- Monthly investment amount (in ₹)
- Expected rate of return (per annum)
- Time period (generally in months)
Upon providing these details, an SIP calculator will help you calculate the total value of your returns. On the other hand, while using a top-up SIP calculator, you need to provide the following details –
- Monthly investment amount (in ₹)
- Annual top-up (in %)
- Expected rate of return (per annum)
- Time period (generally in years)
The SIP top-up calculator helps you know the total value of your mutual fund returns too, by accounting for the top-up SIP contributions that you will be paying in the upcoming months.
What are the benefits of using a top-up SIP calculator?
Here are the key benefits of using a top-up SIP calculator –
- A top-up SIP calculator helps align your investments with your investment goals: The nature of your financial goals is always changing. Inflation keeps reducing your purchasing power over time, and an effective way of aligning your investments with your investment goals is to increase your SIP contributions by using a top-up SIP calculator.
- You can conveniently calculate your future returns using this calculator: Online SIP top-up calculator, SIPs are accurate, and they also account for inflation while calculating your future returns.
- Such calculators are free of cost: One of the best things about online top-up SIP calculators is that they are free to use. You can access them by visiting the sites of most banks or mutual fund houses.
How can you use a top-up SIP calculator to start contributing more toward a mutual fund?
You can follow these steps to start contributing more towards a mutual fund after using a top-up SIP calculator –
- Note down your investment goal and investment horizon.
- Estimate the extra amount you need to invest to meet that goal.
- Use a top-up SIP calculator to calculate your revised SIP returns.
You can use a top-up SIP calculator to increase the value of your SIP contributions and align your investments with your investment objectives. Top-up SIP calculators are online tools that are free to use, and they offer accurate results.