Mutual funds have become one of the best investment avenues that most individuals have chosen to opt for. Returns can be accurately estimated even if these investments may be subject to risk factors related to the market. It is a scheme that is professionally run by an asset management company and the money is pooled in from various investors.
What is a Mutual Fund Returns Calculator?
This calculator helps investors find out the approximate returns on the amount of capital that has been invested. Financial planning can easily be focused on the utilization of this tool. At different rates of interest, the expected corpus can be calculated and different variables are taken into consideration in order to do so. A forecast of the maturity value can be found out and this can be done even before any money is invested. You can go with the option of investing in a lump sum or through SIP.
How can a Mutual Fund Returns Calculator help you?
- The different types of mutual fund returns are absolute return, annualised return, trailing return, total return, rolling return and point to point return. This calculator simply makes all these factors easier to understand and simplifies the entire procedure of finding out the expected returns.
- The entire estimate for periods where one, three and five years of investment are concerned will be given.
- Navigating this calculator is simple and easy which allows anybody to use it without any additional ramifications being faced.
- Plans for the future can be made on the basis of the returns that are expected.
- A proper budget can be created for expenses. The goals and objectives that individuals may want to achieve can be successfully fulfilled as an approximate estimate on the returns are known.
- The estimate on the returns which are provided will be accurate.
- Manual calculations do not need to be done and it results in lots of time being saved.
- This tool can be accessed anywhere and at any time as it works online. This feature has proven to be very beneficial when it comes down to planning.
How do Mutual Fund Returns Calculators work?
The formula that is used to calculate the returns is,
Future Value = Present Value (1 + r/100)^n
r stands for the estimated rate of return.
n is for the duration of the investment.
Systematic Investment Plan (SIP) is another avenue that allows you to invest in mutual funds. This is where an investor puts in a specific amount of money monthly.
Three main data factors that need to be considered and are, the amount invested, the return on investment, and the duration of the investment.
The three main types of stocks which can be invested in are,
- Equity funds
- Debt funds
- Hybrid funds
The steps which are necessary to use the calculator are quite simple. This is the procedure which is to be followed,
- The amount that is to be invested has to be entered.
- The expected rate of return as well as the period or duration of years for which the investment has been made needs to also be put in.
- The appreciated amount of the investment which has been made at the conclusion of the set period of time will be displayed in a short period of time.
The total investment is INR 100000 with an expected return rate of 10% and the time period is 5 years.
The amount of estimated returns that are to be received is INR 61051. The total value would equal INR 161051.
Q1. In India, how many mutual fund schemes are available?
Ans. In accordance with the Fiscal Year 2018, there were 1013 mutual fund schemes in India.
Q2. How do I invest in mutual funds online?
Ans. Investments can be made directly through the direct plan by visiting the website of the fund house. The required details need to be filled in and you can start investing after that.
Q3. How much money can be invested in mutual funds every month?
Ans. Investment can be done through SIP and the lowest amount that can be invested goes down to INR 500 on a monthly basis.
Q4. Is the Calculator difficult for new investors to use?
Ans. This Calculator is simple and free which makes it a good choice for old as well as new investors who want to invest their money in mutual funds and get an approximate idea of the returns that will be gained.
Q5. Can mutual funds have negative returns?
Ans. Yes. Negative returns are a risk that is always present and in order to avoid this situation, adequate planning as well as assistance can be taken.
Q6. How does the interest get calculated on mutual funds?
Ans. Interest is not paid on mutual funds but the returns are calculated based on various different variables which are related to the performance of the fund that is to be invested in.