Mutual funds are fast becoming a preferred choice of investment among Indian investors. While these investments are constantly subject to market risks, an investor can easily estimate the returns by using a free mutual fund calculator from Fisdom. This way, an investor can arrive at the value expected from investments made. Here, we will discuss in detail about the Mutual Fund Calculator and how investors can make the most of it to gauge their returns on investment.
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What is a step up mutual fund calculator?
A mutual fund calculator helps investors to calculate the returns from a mutual fund investment. It allows them to calculate an investment’s maturity value, especially while investing through the SIP route
This easy-to-use tool helps investors to get a fair idea of a mutual fund investment’s maturity value, even before they have invested any money in it. Investors can easily budget for expenses and track their financial goals by estimating the funds expected at maturity. In the calculator, one can enter the SIP amount, SIP duration, SIP frequency and the planned annual increase in SIP to calculate the maturity amount for an approximate rate of return on the investment.
Investment in mutual fund investment through SIPs is an ideal way of investing for a variety of reasons. An investor can choose the amount of investment, rate of return and the investment duration to know the maturity amount.It is important to select the SIP amount, frequency, duration of the investment, and the expected rate of return. The mutual fund calculator then calculates the value of the investment at maturity.
What is SIP?
SIP stands for Systematic Investment Plan. It is a method of investing a fixed amount of money at regular intervals, typically monthly, into a mutual fund. SIP helps average out market fluctuations and enables an individual to invest small amounts regularly to reach their financial goals.
Steps to use Fisdom Step Up mutual fund calculator
It is very easy to use Fisdom’s mutual fund calculator. Both, new as well as seasoned investors can conveniently use it to estimate returns on their mutual fund investments. Mentioned below are the steps to be followed for estimating SIP mutual fund returns using the calculator:
- Select the SIP amount
- Enter the expected rate of return
- Enter the SIP frequency
- Lastly, provide the expected increase in SIP amount annually to get the relevant figures for your investment.
The calculator will then reflect the net amount that can be generated at the end of the investment tenure
Benefits of Fisdom Step up mutual fund calculator
The Fisdom Mutual Fund Calculator is based on the concept of future value to give investors a near-accurate estimate of the investment’s maturity value.
1. Stepping up investment
In a Systematic Investment Plan, an investor can instruct the fund to deduct a fixed sum every month from a linked bank account and invest the same in a chosen mutual fund scheme. It allows one to buy a different number of units on an ongoing basis without worrying about the right time of investment. It also allows investors the benefit of rupee cost averaging and power of compounding.
The mutual fund calculator acts as a scenario-based financial tool, enabling investors to calculate the yields from mutual fund investments. Fisdom’s step-up mutual fund calculator allows investors to increase SIP amount every year and estimate future returns thereforth.
The Mutual fund calculator calculates the returns on an SIP investment based on certain parameters. By inputting the SIP amount, the investment duration and the expected rate of return, an investor can use the calculator to know the potential results within seconds. For example, an investor who wants to invest in a mutual fund through SIP can use the calculator to determine returns for every step-up or higher contribution of SIP. This encourages better financial planning since an investor can check percentage change in results in every percentage increase in SIP contribution.
2. Estimate returns from Lump-sum investment
Depending on the disposable income, an investor can invest a considerable amount in a mutual fund scheme of choice. It is also possible to invest substantial earnings from the sale of an asset or inheritance, for example. However, investing a lump sum amount comes with higher risk. A lump-sum investment is when an investor invests a larger amount in a single go in a mutual fund scheme. One of the main advantages of a one time investment is that NAV value changes do not impact the number of units that an investor can purchase.
To estimate the ROI on a lump-sum mutual fund investment using the mutual fund calculator, an investor needs to input three key data points; namely, investment amount, rate of return and the investment duration.
How can you invest in mutual funds?
Mentioned below are some of the ways in which an investor can invest in mutual funds:
1. Direct Plans:
An investor can approach an asset management company (AMC) and invest in the direct plan of a mutual fund scheme of choice. These plans generally have a low expense ratio, as there is no distributor commission involved. Therefore, an investor can earn a higher rate of return in the long-term.
2. MF Agents & Distributors:
Investors can reach out to a registered mutual fund distributor who can assist in the requisite documentation for making a mutual fund investment. In this case, an investor can choose a regular plan which usually charges a distributor’s commission.
There are many reliable third-party portals available online. Fisdom is a zero fee, zero commission app based investment platform that can be downloaded on a smartphone to begin a seamless mutual fund investment journey. It offers a wide range of mutual fund schemes with varying risk and return profiles.
Smart investors today prefer to know the ROI before making an investment decision. A Mutual fund calculator can be a good starting point for sensible investment decisions. Investors can make the most of this and reap long-term benefits by using different mutual fund characteristics to estimate potential returns using a mutual fund calculator.