Mutual Funds

How Can You Make The Best Use Of A Mutual Fund Return Calculator

Save & Invest

Which platform is the best for investment? If sometimes you are having trouble remembering which investments offer rolling returns, point-to-point returns, annualised returns, and total returns, mutual fund return calculators will help you calculate the returns from mutual fund investments. Keep reading to learn more. 

About mutual fund return calculators

A mutual fund return calculator is a tool that helps investors determine their returns and the potential growth of an investment based on a certain investing plan. Mutual fund return calculators in India can assist investors in understanding how far they will be able to achieve their goals based on the planned amount of investment, time horizon, and rate of return. Investors in mutual funds should ideally take a goal-oriented approach to their investments.

Mutual fund return calculators now come in two varieties: the lump sum calculator and the SIP calculator. Let’s find out more about the two in depth.

How do you invest your money in mutual funds?

  1. Lump-sum calculator. 
  1. Systematic investment plan (SIP).

Lump-sum calculator

A mutual fund involves making a single, large investment. Based on the performance of the fund, you will get returns that will compound annually until you redeem your investment. You may calculate the returns from your lump-sum investment using a mutual fund return calculator.

How can a lump-sum amount be invested in mutual funds? You can set up a direct mutual fund investment plan with an asset management company. You have two options for investing: offline and online. You must give your local mutual fund branch confirmation of identity and residency, including two passport-sized pictures, as part of your KYC. An online platform can be used to invest in mutual funds. 

SIP calculator

SIP is an additional method of investing in mutual funds. It helps people who lack the resources to invest a large sum. You can start a SIP in any mutual fund and continue investing a set sum each month, quarter, or year. With the help of mutual funds, you may invest your monthly savings and leverage the power of compounding to amass a sizable corpus over time. The SIP mutual fund return calculator can be used to estimate the returns on your SIP investments.

How can you make a SIP investment in mutual funds online?

  • Before investing in mutual funds, you must complete your KYC. Fill out the KYC application form online and then send it to the KYC Registration Agency (KRA) along with your ID and proof of address that you have signed yourself.
  • The following action is to visit the fund house’s website and pick a mutual fund strategy that appeals to you.
  • You can make the login information and then fill out the registration form with your name, phone number, and PAN card, among other things.
  • After that, you give the specifics of your bank account and the SIP auto-debit amount.
  • You can get to your mutual fund plan by logging in to the account that the fund house made for you.
  • The SIP may be continued till the time limit is reached (you decide how long the SIP lasts).

How is the SIP return calculated?

Absolute returns, annualised returns, CAGR, and XIRR can all be used to compute SIP returns. But the most accurate method for forecasting SIP returns is CAGR.

The compound annual growth rate, or CAGR, calculates the average yearly increase of an investment throughout the course of the investment. The following is how to calculate CAGR:

CAGR = (ending value/beginning value) ^ (1/amount of months or years) – 1*100

When a withdrawal is made, the net asset value (NAV) equals the ending value, whereas when an investment is made, the NAV equals the beginning value. The investment lasts for a predetermined number of months or years.

Advantages of using mutual fund return calculators

Using an online mutual fund return calculator has a number of benefits.

  • Even without making any investments, you can evaluate the profits from your lump-sum or SIP investments. This assists you in developing sound mutual fund investment strategies and setting realistic goals and objectives.
  • You can choose whether lump-sum investments or SIPs are best for you based on the anticipated returns. Go for the former if you believe that investing a large sum is the best way to use your extra cash. Or you can begin a SIP if you believe you wish to invest less initially and continuously over time.
  • Since the mutual fund return calculator makes it simple to alter the inputs, and you can compare several mutual funds based on their historical performance. You can also compare different investment plans based on different ratios of the amount you invest and how long you keep it to see which one best fits your needs.

Most importantly, a mutual Fund return calculator spares you the trouble of performing intricate calculations by hand. Within a few seconds, you can receive an estimated return.

Summing up

The purpose of this article is to give a comprehensive examination of mutual fund return calculators. Whether an investment is the best choice for you should be determined carefully. Users ought to always carry out their own research. Also, visit Piramal Finance for more in-depth financial knowledge.