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Every year brings the possibility of a fresh start with it. Regardless of the events of 2020, it is time to look forward to the new year and make plans for it. For most of us, financial planning is the place to start it. While the last several months have been a challenging time for all of us, you can start the next year on a positive note by putting your finances in order.

Systematic Investment Plan or SIP

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One of the better investment options for that purpose may be a Systematic Investment Plan or SIP. It can be the ideal way for you to accumulate a substantial amount of money within a certain period.  With the help of a SIP calculator, you can simplify the process of investment considerably for yourself.

Essentially, an SIP is a means of investing money in mutual funds. It allows you to put in a fixed amount regularly in a preferred mutual fund scheme. It has become a popular choice of investment as it is one of the safest options that can suit different types of investors. Here are some of the reasons why you should consider a SIP to plan and grow your money efficiently:

  1. Small Investment Amount

SIPs are known for their affordability, which makes them suitable for beginner investors. Typically, you can start with as little as Rs. 500 per month to invest in a mutual fund scheme with a SIP.  Using the SIP calculator may give you a better idea of how much you should invest for the best results.

If you have just started working, you may not be comfortable investing a large sum of money. The SIP calculator can help in envisioning long-term financial goals without parting with a sizeable amount. It is safe to say that it is among the most convenient investment options today.

  1. Financial Discipline

Developing the habit of saving and investing money for the future can be challenging for some people. But, a straightforward investment option such as SIP can enable financial discipline effectively. Most people fail to meet their financial objectives because of irregularity in the investment pattern. The SIP, by its very nature, eliminates that possibility.

When you evaluate the required amount with a SIP calculator, you are more comfortable with your budget. The fixed amount will be automatically debited and invested in the scheme of your choice, reducing the chances of regularity errors. In case you find it difficult to stay on top of your investments, the investment in SIP can go smoothly even if you don’t remember to make the payments every month.

  1. Compounding Benefit

The SIP calculator helps you arrive at the initial investment amount. After that, the invested amount in the monthly SIP offers returns. These returns are then added to the actual amount and reinvested. Over time, the compounding benefit allows the investors to gain increased returns and accelerate wealth-creation.

The SIP calculator can also help estimate the maximum return possible from the investment depending on the number of years. Hence, the earlier you begin investing in a SIP, the larger corpus you can accumulate in the coming years.

  1. Expand Investment Portfolio

It is advisable to put your money in different investment vehicles to adjust the risk factor and balance the returns. The SIP calculator will give you a perspective on how much you can earn in a fixed time frame.

But, it is wiser not to put all your money into one asset. For instance, you may also want to consider FD for a more conservative investment approach. Having a mixed investment portfolio will ensure that you meet long and short-term goals comfortably.

Resolve for a Financially Healthy New Year

The financial responsibilities evolve as you go through different stages of life. A few years from now, the general cost of living will also likely increase. Creating a sound financial plan from the start of a new year can help prepare for such circumstances. It is in your best interest to diversify the investments with different options such as SIP or FD.

When it comes to your hard-earned money, you want to go with a trusted bank for investment choices. Axis Bank is one of the renowned options for SIP investment that allows you to fulfill your life goals without a hassle. You can check the SIP calculator to understand your requirements more appropriately and decide.

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May 2024