Mutual Fund Calculator - Calculate your Returns for SIP

Posted by somesh mane on October 5th, 2018

Investing in mutual funds has become extremely easy and convenient with the introduction of SIP (Systematic Investment Plan) system. Through SIP the investor can choose the instalment amount he/she feels affordable to contribute every month.  With the mutual fund calculator, an investor can plan well before enrolling in the SIP.

Mutual Fund Calculator

Mutual fund calculator is an advanced online tool that helps in complex calculation of mutual fund returns over the pre-decided investment period. The mutual fund calculator is available free of cost to use on many online portals. Through this tool, an investor is able to predict the value of the investment and its returns in the future. All you need to do is input the following values in the mutual fund calculator.

1. Investment amount
2. Number of Years
3. Expected Rate of Return per annum

To get high returns over a long period of time, it is vital that the investor makes a well-planned investment, and this is where a SIP calculator can play a huge role. The SIP calculator helps a prospective investor know the approximate returns for a particular amount on maturity, invested at regular intervals (mostly monthly). If the investor is looking for a particular return for long-term goals like retirement then he/she can come to know approximately how much amount needs to be invested at the present moment to reach the long-term financial goal in future.

Why do we need Mutual fund calculator?

To calculate mutual fund returns at a different rate of interest and taking different scenarios of investment in the picture would be a bit difficult if one has to do all the calculations manually. Most people dread the financial calculations and hence they need the services of a financial advisor or consultant. Not everyone can afford the services of a consultant or financial advisor all the time, especially if you are a small-time investor who wants to start a mutual fund SIP with a modest amount. This is where a mutual fund SIP calculator will come in handy. It can perform the calculations for your investment goal in a matter of seconds. The good thing about the mutual fund calculator is that it provides you with the actual results without any bias or favouritism towards any particular mutual fund scheme. This will help you to have complete control over the decision which will help in making a wise investment.

How does SIP calculator work?

SIP calculator uses basic important data to calculate the absolute value of your mutual fund investment. Below are some of the important steps that the potential investor needs to follow to calculate the returns using the SIP Mutual fund calculator.

Step one – Investor will need to enter the monthly SIP amount that he or she can contribute every month. Mutual fund investments can be started for a minimum SIP amount of INR 500 per month. Some schemes even have a minimum amount of SIP as low as INR 100 per month.

Step two – The following step involves the expected rate of return that the investor can look forward to on his/her investment. The rate of return can be checked from the history of the fund or the future market conditions. Basis this evaluation, the expected return of return in future on a particular mutual fund is calculated.

Step three – In the last step, you need to enter the period of the SIP mutual fund scheme. The tenure of the plan is extremely important as the investor needs to decide for how long he/she wants or can invest through SIP. The minimum term in any SIP is of six months only but the industry experts recommend the longer you keep your investment in the mutual fund the better returns it will give you. Most top mutual funds returns have been only in the long run. 

The values or variables on the SIP mutual fund calculator can be changed online numerous times, which will help you in identifying the most suitable investment plan. The investor should be aware of one important thing that SIP mutual fund calculator does not account for the inflation and the capital gains tax when giving the estimated rate of investment after the tenure of the SIP scheme.

What is a lump sum mutual fund calculator?

Mutual fund calculator which calculates the one-time lump-sum investment’s estimates returns in the mutual fund is the called lump-sum mutual fund calculator. All you need to do is enter the lump-sum amount, the expected rate of return and duration of the investment to know the final value of the investment on completion of the duration of the mutual fund scheme.

Benefits of Mutual Fund Calculator

• Mutual fund SIP calculator removes your dependency on financial advisor agents to calculate the returns on the investment

• Gives you the freedom to calculate and plan your mutual fund SIP at any given point of time and the place.

• Save you lot of time as it calculates the complex formulas and equations for you, giving you accurate results every time

• Mutual fund SIP calculator is a free tool available online and is accessible to anyone who wants to start a SIP for investing in mutual funds

• It does not try to influence the decision of the investor and always show the projections of the investment as per the variable and values entered by the potential investors.

• As it does not cost any money to the investor to use the tool, the investors can increase his returns by avoiding any cash going out as commission to a middleman like distributors or agents.

• The mutual fund SIP calculator also serves as a free learning tool for the investor. It encourages the investor to learn more and in the process become a pro-investor.

• The user-friendly and simple-to-use mutual fund SIP calculator can be used by even investors who are not tech savvy or good with calculations.

Conclusion

Calculating returns on SIP using a mutual fund calculator has become very easy and an efficient way of decision making for investing in mutual funds through SIP.  Tools like these help in increasing the confidence of the investors as actual returns can be calculated using the systematic and reliable method. Mutual fund calculator engages the investor in the investment and in the process the investor gets to learn about the investments and make good returns, resulting in wealth creation.