What is a Mutual Fund Calculator?
Mutual Fund Calculator is a tool that predicts the overall return on investment that an individual gets on maturity, given the principal investment amount and the expected rate of return. It takes into account both the investment routes- Lump-sum and Systematic Investment Plan (SIP) – and finds out the returns generated from various Mutual Fund investments.
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How Does a Mutual Fund Calculator Work?
One should make use of a mutual fund calculator to calculate the final return value on the basis of expected rate of return. Paisabazaar’s Mutual fund Calculator is an easy to use tool for predicting returns on investment.
An investor needs to put in the principal investment amount and the expected rate of return, to know the final amount payable at maturity. Conversely, investors can also put in the expected maturity amount to predict the SIP/Lumpsum investment they need to make to reach this goal.
Systematic Investment Plan (SIP) refers to the regular investment of small amounts of money in a mutual fund scheme at predefined intervals. It is a disciplined manner of investment where one can get a hold on their spending and save judiciously. People who do not have a large sum of money in hand can opt for SIP mode of investment.
SIP calculator is a tool that predicts the overall return on investment an individual would get at maturity, given the principal investment amount and expected rate of return. The principal amount here consists of the periodic payments (usually monthly) that individuals make in a mutual fund scheme via Systematic Investment Plan (SIP).
For example if you make a SIP of Rs.500 for 12 months and the NAV when you purchase units if Rs. 5, then you would have purchased 100 units of the scheme. In the following month if the NAV increases to Rs. 10, you will only buy 50 units of the scheme and so on. The SIP calculator is a predictive mutual fund calculator that gauges the value of your mutual fund returns based on some key inputs provided by you. All you need to enter into the calculator is the SIP installment amount, the expected rate of return and the duration of the SIP to get an answer within seconds. For example an SIP of Rs. 1,000 made for 12 months with an expected return of 15% will give you a final value of Rs. 13008. However do keep in mind that the results provided by an SIP calculator are estimates based on the information that has been provided and is liable to change according to market movements.
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Lumpsum investment in a mutual fund refers to a one-time investment that an investor does annually. If you have a large sum of disposable income in hand, coupled with a good risk appetite, you should go for a lump sum investment.
Lumpsum calculator predicts the yield on your present investment given the expected rate of return and the time period of investment.
For example, if you are investing Rs. 10,000 in a debt mutual fund for a period of 10 years with expected returns of 10% annually, the lump sum calculator will give the final value of your mutual fund returns as Rs. 26,851. This too is an estimate based on the data you put into the mutual fund calculator and the returns may become higher or lower depending on various market factors.