How Can Mutual Fund Calculator Help You?

Mutual Fund Returns Calculator

Total Investment (₹)

Expected Return Rate (%)

Time Period (Years)

Total Investment

Est. Returns

Total Value

MUTUAL FUND CALCULATOR

The mutual fund calculator is nothing but a mutual fund returns calculator. It helps you simulate various outcomes based on structured input. The MF return calculator can either be a generic calculator, as it normally is or it can be fund specific, in which it needs to be backed up with mountains of data. However, an MF return calculator that is fund specific can be more actionable as otherwise the mf calculator is no better than a pure future value calculator.


HOW CAN MUTUAL FUNDS CALCULATOR ADD VALUE ?

Let us first and foremost focus on how the mf calculator can provide value added inputs to you as an investor or as a potential investor. Here is what the mutual fund returns calculator provides you with.

  • The mutual fund calculator provides you estimated returns for the investment tenure, be it 1-year, 3-years, 5-years etc. Ideally, take a perspective of 3-years plus
  • Normally, such mutual fund returns calculators are free tools available either on the MF websites or on the sites of aggregators and can used with basic data and tech skills
  • It has got actionable value. The mutual fund returns calculator helps investors to plan and manage their finances better since estimated future value of investments is known

  • d. It allows you to budget for expenses and achieve your financial goals, as you already know the amount of money you will get at maturity.
  • e. While returns indicated are fairly accurate, use discretion as it is an estimate after all. Since mutual fund investments are subject to market risks, make room for errors

  • To sum it up, the big merit in such mf calculators is that they give a good indicative picture well in advance.


    COMPONENTS OF MUTUAL FUND CALCULATOR

    The mutual fund calculator essentially helps you to simulate various situations and accordingly calculate the returns from the mutual fund investments. You can essentially calculate the maturity value of an investment depending on whether you plan to invest lump sum or as a systematic investment plan or SIP. Effectively, the mutual fund returns calculator helps you to get an idea of the maturity value of the proposed mutual fund investment, even before you invest.


    Here are some of the key components that go into the calculation of the mutual fund returns calculator. For example, if it is a systematic investment plan or SIP, then the inputs include the SIP amount, duration of SIP, frequency of SIP, SIP date etc. This can be used to estimate returns over a certain period of time. Alternatively, it can also be a lump-sum investment, in which case it is a lot simpler as the calculation of multiple points for IRR is not there unlike a SIP.


    In a lumpsum investment in mutual funds, you only select the amount of investment, rate of return and duration of investment to get the maturity amount. In a jiffy, the mutual fund returns calculator shows you the value of the investment at maturity.


    HOW TO USE MUTUAL FUNDS CALCULATOR ?


    Let us look at the application of the mutual fund returns calculator from the perspective of a one-time lumpsum investment and also as a SIP first.


    How to use mutual fund calculator for lump-sum investment


    Let us assume that you have invested a lump-sum amount of Rs.5 lakh in a mutual fund scheme for an indicative period of 8 years. If you estimate the likely CAGR rate of return on the mutual fund at 9% per annum. You can calculate the future value of the investment using the formula: Rs.500,000 x (1 + 9%) ^ 8, which will be Rs.996,281 in value. Again, this is indicative and not the actual figure. The actual figure could be higher or lower. But such an analysis helps you to plan better.


    Such calculators can either be fund specific where you can make fund wise projections based on past returns. That is assuming that past returns sustain in the future but it rarely happens that a star performer suddenly becomes a lagged. So, sticking to star performers is normally a safe option and the only thing you need to do is to ensure that you have a hang of the winners and use past returns to project. Generic calculators are more common but they are not really actionable.


    How to use mutual fund calculator for SIP investment


    Let us assume that you have opted for a SIP instead of a lump-sum amount. You decide to invest Rs.10,000 per month on the 15th day of each month and estimate the annual return at 8.5% per annum over the next 10 years. You can calculate the future value of the SIP investment using the internal rate of return (IRR) formula. Such calculators are available free and you can also make these calculations in excel, which is relatively more complex.


    Even in the case of SIP calculators, prefer the fund specific calculators as they are more actionable for investors. Remember that the SIP is all about rupee cost averaging and hence it is a long term relationship with the fund. Hence fund choice matters a lot. Rather than a generic SIP calculator, a fund specific calculator can be more useful for investors.


    FREQUENTLY ASKED QUESTIONS (FAQs)

    Can there be negative returns on mutual funds ?

    Equity funds are volatile and they do see negative returns in the short term when the markets are in bad shape. However, even in debt category, some funds like credit risk funds have given negative returns.


    How many mutual fund schemes are there in India?

    It depends on how you look at it. There are over 40 AMCs and over 2500 schemes. Of course, each scheme is further subdivided into dividend options, growth options as well as into regular plans and direct plans.


    How to buy Mutual Funds?

    It depends on how you look at it. There are over 40 AMCs and over 2500 schemes. Of course, each scheme is further subdivided into dividend options, growth options as well as into regular plans and direct plans.


    What is the minimum amount I can Invest in Mutual Funds?

    For lump sum investments it is normally a minimum of Rs.5,000 but for SIPs it can be as low as Rs.500 per month also.


    How much return can I expect from mutual funds?

    Mutual funds are risky instruments so you cannot predict returns. In the last 5 years, equity funds have generated 12-15% on an average while debt funds have returned 7-9% on an average.


    What are the top 5 mutual funds?

    That depends on the measures you use and returns keep changing on a daily basis. If you are looking at top funds on AUM, then typically you have SBI MF, HDFC MF, ICICI Pru MF, Aditya Birla Mutual Fund and Kotak Mutual in the top-5 list.


    What are the Benefits of using a mf calculator?

    MF calculator helps you to get an agnostic view on the likely returns you can earn and also simulate different scenarios.


    Is mutual funds safe?

    All mutual fund investments entail risk. It is in your hands how you handle and manage that risk.