Everyone wants to make proper savings of their money which can be safer giving them better benefits over a period. Saving through various ways are been done for many years.
There are some traditional methods of saving money that can keep their money safe and give better returns further.
Now, for the last few years, the Systematic Investment Plan [SIP] is another way for saving money. Using the SIP return calculator, you can calculate the investment you make and the returns you can expect over a period. Many people have successfully gained better benefits using SIP-saving methods.
We will look in more detail at traditional methods and SIP methods by using a monthly SIP calculator for savings.
Which is a better way to save money: Traditional Method or SIP Calculator?
Here we will look in more detail at both methods for saving money:
Traditional Saving Methods
Traditional saving methods refer to the conventional approaches individuals have used to save money over the years.
Some common traditional saving methods include:
1. Savings Account
Opening a savings account with a bank and depositing money into it. The account may earn a nominal interest rate, usually lower than inflation, resulting in limited growth.
2. Fixed Deposits (FDs)
Investing a lump sum of money in a fixed deposit account for a specified period. FDs offer higher interest rates than savings accounts, but the interest rates are often fixed, providing limited flexibility.
3. Recurring Deposits (RDs):
Making regular monthly deposits into a recurring deposit account with a bank. RDs offer a fixed interest rate but do not provide the same level of growth potential as other investment avenues.
4. Post Office Savings Schemes
Utilizing various savings schemes offered by post offices, such as Public Provident Fund (PPF), National Savings Certificates (NSC), etc. These schemes often offer fixed interest rates and longer lock-in periods.
SIP Calculator
A Systematic Investment Plan (SIP) calculator is a tool that helps investors estimate the potential returns from investing in mutual funds through a SIP. It considers various factors such as the investment amount, duration, expected rate of return, etc.
Advantages of SIP Calculator:
1. Savings Account
Opening a savings account with a bank and depositing money into it. The account may earn a nominal interest rate, usually lower than inflation, resulting in limited growth.
2. Flexibility
SIP calculators provide flexibility in choosing the investment amount and duration based on individual preferences and risk appetite.
3. Compounding Benefit
SIPs benefit from the power of compounding, as the returns generated from investments are reinvested, resulting in potential exponential growth over the long term.
4. Historical Data
The monthly SIP calculator often uses historical data to estimate the potential returns, providing a realistic outlook for investors.
5. Comparative Analysis
These calculators allow investors to compare different investment scenarios by adjusting variables such as investment amount, duration, and expected rate of return, helping them make informed decisions.
You can observe from the above factors that both provide a basic saving way. However, SIP methods give more substantial growth for savings which can increase your finances.
If you need experts to give a better plan on the SIP method for savings then outsource to a reputed agency.
Meru Accounting provides expert services using a SIP return calculator for making proper savings. They have a monthly SIP calculator to help you understand the investment you make and the relevant returns given.
Meru Accounting is a well-known accounting service-providing agency across the globe.
