Mutual fund calculator - A Deeper Insight
There are different traditional and non-traditional investment instruments in India. Many people invest in traditional instruments such as FDs, RDs, and more. However, over the course of years, non-traditional instruments such as mutual funds have become popular too. Mutual funds are accessible and that’s why, even people from rural India are now investing in mutual funds. Despite all the popularity, there are still many who don’t understand mutual funds completely. In today’s blog, we will discuss everything about mutual funds:
A mutual fund is a pool of money collected by investors to purchase a range of securities and is managed by professionals. The returns are then distributed amongst all investors after standard deductions. This way, the investor can benefit from the market while not being actively involved in investments.
Some of the most important benefits of mutual funds include:
Risk management: Mutual funds are managed by experts who understand the market and thus, take wise investment decisions. These decisions keep in mind the risk appetite of the investors/fund and thus, the chances of loss are minimal. However, since most mutual funds are market-linked, there is some risk involved. Investors must understand the risk and only then invest in any mutual fund.
SIP: Investing a large chunk of money at once is not wise. Times have changed; most Mutual funds now allow investors to choose SIP (systematic investment planning). In SIP, you get to invest in a mutual fund every month. This reduces the financial burden and also helps in averaging the cost of investment. The SIP calculator will help you understand the power of compound interest. Once you use the SIP mutual fund calculator and compare the lump sum investment with the SIP investment, you will know the benefits of SIP.
Higher returns: Mutual funds are known to offer higher returns than traditional investment instruments such as FDs, RDs, and so on. If you are just starting to invest, you must have a healthy mix of traditional and non-traditional financial instruments.
For everyone: Mutual funds have become more accessible than ever. It won’t be wrong to say that mutual funds are for everyone. In fact, we’re seeing an influx of mutual funds from even rural India. This shows that the country’s financial literacy is rising and people are more receptive to non-traditional mutual funds.
When you invest in FD, you know exactly the amount that you will get on maturity. However, that’s not the case with mutual funds. Since mutual funds are subject to market risk, one cannot accurately tell how much would be the returns. That’s why, it’s important to use the mutual fund calculator.
A mutual fund calculator is an online tool that will tell you roughly how much returns you will get when you invest in a particular mutual fund. A mutual fund calculator uses historic data to estimate how would returns you could get in the coming years. Typically, most mutual fund calculators and SIP calculators provide estimates for 1 year, 3 years, 5 years, and 10 years time horizons.
The benefits of using a SIP calculator or mutual fund calculator are as follows:
Gives you a fair idea of the returns you can earn through the investment.
Eliminates manual calculations.
Convenient to use it anywhere on the go.
To use the SIP calculator or mutual fund calculator offered by Motilal Oswal Mutual Fund, click here.