“If you fail to plan, you are planning to fail!”
― Benjamin Franklin
Planning is one of the most crucial elements when it comes to building a strong financial portfolio and heading towards your financial goals. When planned meticulously and in advance, an investor can reach his/her goals in a systematic manner, with time, discipline and the right financial advice. In this regard, there are tools like the mutual fund calculator which can help us in making informed plans when it comes to investing in mutual funds. Online mutual fund is the primary reason why more and more potential investors are choosing this way to invest their hard earned savings and let it grow. It is convenient, user friendly and transparent as well, making it a primary choice among retail Indian investors to grow their wealth.
When we speak of mutual fund calculator, there is a variety of calculators available in the market which helps investors navigate this space. To name a few –
Retirement Planning Calculator
Child education calculator
Goal setting calculator
Different tools have different purposes and one can choose which one to use, based on their requirement. Now, suppose, you are planning a lumpsum investment, then using a lumpsum calculator would help. Analysing lumpsum investing further, the investor has to make a one time or bulk investment in chosen mutual fund schemes (equity or debt). Once they have invested, the amount remains there and grows or falls with the market conditions, with time.
To further understand lumpsum investment, one can use lumpsum calculator. What this tool does is that it gives an estimated corpus one can expect after their planned investment tenure, assuming a certain rate of return. With the help of this probable amount, one can finalise various investment factors such as tenure, amount, type of funds, etc.
Suppose, one invests Rs. 5 lakhs today in a chosen equity mutual fund for a period of 10 years and assumes 12% return per annum, the expected corpus here would be more than Rs 15 lakhs.
Another useful mutual fund calculator is the SWP calculator. Systematic withdrawal plan (SWP) is a mutual fund facility which allows you to draw a fixed amount from your mutual fund investment at a specified frequency, which can be quarterly, monthly or yearly). In this case, you can mention the day of the month when the withdrawal should be made and the pre-determined amount will be credited directly to your bank account on the specified day. You can continue your SWP as long as there are balance units in your mutual fund scheme account.
Since it is difficult to make accurate calculations regarding monthly withdrawals, matured sum, units left, the SWP calculator is used. It is an online tool that can compute within seconds, your matured sum in mutual funds, after the withdrawals made by you, through SWP.
In order to use this, you need to first select the scheme that you have invested in and wish to withdraw from. Then, enter the initial investment amount, withdrawal amount, SWP period i.e. the tenure for which you want your SWP instalments to go on. Post entering all the required values, press calculate. The SWP calculator will display the number of SWP withdrawals that can be made from your investments, the total withdrawal amount during the SWP period, remaining value of the investments at the end of the SWP period and the annualized returns.
In this read, we did an analysis of some primary mutual fund calculators which are simplifying mutual fund investments in India