Comparing mutual fund returns with a mutual fund calculator

How does a mutual fund calculator help investors plan for their SIP investments?

Investors can decide their investment goals before starting a mutual fund investment. Using a mutual fund SIP calculator can help investors achieve these specific goals by analysing whether the particular investment scheme helps them achieve their investment objectives.

How do mutual fund calculators work?

Mutual fund calculators can help investors calculate their lumpsum returns and their SIP returns. The calculator requires an investor to enter information such as their SIP start and end date, their SIP amount, and their SIP frequency (for an SIP investment). For a lumpsum investment, the calculator asks for the lumpsum amount and the maturity date. Based on this information, the calculator calculates the individual’s total returns on the maturity date. Calculators also require investors to specify their investment strategy, which can range from Aggressive (expected returns – 12%), Conservative (expected returns – 6%), Balanced (expected returns – 8%), and a customised strategy.

How to use a mutual fund calculator?

To use a mutual fund calculator to calculate their investment returns, an investor must follow these steps:

• Choosing an investment method: The first step that the investor should take is choosing an investment method – Systematic Investment Plan or a lump sum investment.

• Entering an investment amount: Next, they must enter the SIP amount. The SIP amount is the amount that an investor invests monthly/quarterly/half-yearly in an SIP scheme.

• Selecting their investment strategy: The next option that an investor is presented with is selecting their investment strategy. The mutual fund calculator calculates returns based on the investment strategy that the investor selects at this stage.  

What are the advantages of using an online mutual fund calculator?

Investors can benefit in multiple ways by using an online mutual fund calculator to calculate their mutual fund returns in advance. Here are the key advantages:

• Online mutual fund calculators are easy to use: The user interface of most online mutual fund calculators is very accessible and easy to use.  
• These calculators help investors save time: Investors need to go through a time-consuming process to manually cancel their lump sum investments. SIP, however, can be cancelled online in a few seconds’ time.
• Investors can compare the returns of several mutual fund schemes by using a calculator: Mutual fund calculators can help investors decide on the scheme that they should choose by comparing their returns online.
• Mutual fund calculators help investors set realistic goals: Using a mutual fund calculator can help an investor set realistic goals and estimate the future value of their investment correctly.  
• These calculators can be accessed for free: Investors can access mutual fund calculators online for free, for any number of times.

One of the many benefits of using a mutual fund calculator for investors is helping them analyse their returns. Investors who wish to earn higher returns through their mutual fund investments must use these calculators to analyse their returns in advance.