A Mutual Fund is a form of financial vehicle that pools money from several individuals to invest in various securities such as money market instruments, stocks, bonds and other assets. Professional money managers run mutual funds, allocating the assets and attempting to generate profits for the fund’s investors.  

Despite the market dangers, the returns on mutual fund investments may be predicted with certainty. A mutual fund return calculator will help you figure out how much money you’ll make over time.

Mutual fund calculator: What is it?

A mutual fund calculator is a useful financial tool that helps you estimate the returns on your mutual fund investments. If you make a one-time investment or a series of smaller ones over time, you can figure out what your investment will be worth at maturity.

It is possible to estimate the maturity value of a mutual fund investment before making a financial commitment using an easy-to-use tool like the mutual fund return calculator. It enables you to plan your spending and reach your financial objectives since you already know how much money you’ll receive at the end of the term. For anticipated profitability, you may plug in the maturity amount, SIP length0 and SIP frequency.

The mutual fund calculator features a formula box where you specify the kind of investment. Investing in a SIP or a large amount is both acceptable and common. The maturity amount is calculated by combining the amount invested, the rate of interest, and the length of time the investment will be held. With a SIP, you may choose the investment amount, frequency, duration, and rate of return. The mutual fund calculator tells you how much your investment will be worth at the end of the term.

Mutual fund calculator: How does it work?

• One-Time Investment

For instance, you’ve made a 10-year commitment to a mutual fund with a one-time investment of Rs 1 lakh. You’ve calculated an annual investment return of 8%. 

The formula for calculating the investment’s future worth is:

Future Value = Present Value (1 + r/100)^n

Present Value (PV) = Rs 1,00,000

r = Estimated return of 8% = 8/100 = 0.008.

n = represents the investment’s 10-year lifespan.

The mutual fund investment’s Future Value (FV) must be calculated at maturity or after 10 years.

Future Value = 1,00,000 (1+8/100)^10

Future Value = Rs 2,15,892.5.

• SIP investment

You may also figure out the valuation of a SIP investment at maturity. Make use of the following formula:

FV = P [(1+i)^n-1]*(1+i)/i

FV = Future worth, or the sum you receive upon maturity.

P = Amount invested through SIP

i = Compounded rate of return

n= Duration of investment in months

r = Expected rate of return

What is the best way to invest in mutual funds?

There are a variety of ways to invest in mutual funds.

• Direct plans

To invest in a direct plan, you might contact an asset management firm (AMC). Because they don’t charge a distributor fee, these programmes offer a low cost-to-income ratio. You will be able to earn a higher rate of return in the long run.

• MF distributor

You may get the necessary paperwork from a licensed mutual fund distributor. You’ll pay a commission to a distributor if you purchase a standard plan.

• Online

Numerous third-party sites may be found on the internet. For a little charge, you may visit any of these locations and invest in a wide range of mutual funds.

How do you invest your money in mutual funds?

Investing in mutual funds may be accomplished in one of two ways. You can invest in a SIP or make a lump-sum investment. 

• Lump-sum investment

An essential part of your discretionary income might be put into a mutual fund of your preference. A profit from the disposal of assets or inheritance may also be put to good use by investing it. However, investing a large quantity of money carries greater risk. That’s why it’s always best to use SIP instead.

• Systematic investment plan (SIP)

You may set up automatic monthly withdrawals from your savings account to be invested in mutual fund schemes via a Systematic Investment Plan (SIP). If you do it this way, you won’t have to worry about timing when you join the market. Compounding and rupee cost averaging are both available to you.

Mutual funds: Investment in India

As part of a direct plan, you may invest directly in mutual funds with an asset management firm (AMC). Once you’ve filled out the KYC application form and uploaded the self-attested identification evidence (PAN Card) and address proof (Passport/Driving Licence/Voter ID), you must additionally provide a passport-size picture. In addition, you must pass the IPV exam (in-person verification).

Regular plans, which allow you to invest in mutual funds consistently, are available via mutual fund distributors. A commission would be paid by the mutual fund firm to the mutual fund distributors or the middleman. In addition to investing in mutual funds offline, you must first visit the mutual fund house, where you must complete an application form and provide documentation for Know Your Customer (KYC) compliance.

Mutual funds: Investment in India for beginners

As a novice investor, you must select the right mutual fund scheme depending on your investing goals and risk tolerance. To invest in mutual funds, you may do it online or offline.

If you’d like to make a direct investment in a mutual fund scheme, you may stop by a branch office of the fund company. A mutual fund provider may help you set up a recurring investment plan.

By accessing the website of a mutual fund company, you may make direct investments in mutual funds. By providing your Aadhaar and PAN data, you may finalize your eKYC for KYC compliance and then participate in the programme of your preference. Before participating in mutual funds, you may complete your KYC with a KYC Registration Agency.

Mutual funds: How to invest without a Demat account?

Visit the AMC branch to place your mutual fund investment straight with the mutual fund business. KYC compliance is as simple as filling out the application and providing self-attested confirmation of identity and address.

It’s possible to use a check for the first deposit, in which case the bank will provide you with an account number and a unique PIN. Regular investment plans for mutual funds may also be purchased via an investment advisor.

If you want to invest in a mutual fund via an AMC, you may do so online. eKYC must be completed by providing your PAN and Aadhaar numbers in the application form. 

Mutual fund: How to invest directly?

The mutual fund house’s office is where you may make your direct investment in mutual funds. KYC compliance requires you to provide your self-attested identification and address verification with your completed application form and two passport-sized pictures. Make your first contribution with a cheque and invest in a mutual fund plan of your preference.

Online direct mutual fund investment

Direct mutual fund investments may be made by visiting the fund house’s website and following the on-screen instructions. You may enter the PAN and Aadhaar data to complete your eKYC while completing the application form. Your information would be verified by the AMC before investing using your account with a bank. 

Money you should put each month in mutual funds

Systematic investment plans, or SIPs, allow you to invest in mutual funds. It’s a way to invest in a mutual fund in which you put a predetermined amount into the scheme of your preference regularly. With a systematic investment plan (SIP), you may contribute as little as Rs 500 per month.

What is the best way to invest in equity mutual funds?

You may make a direct investment in an equity fund with the asset management business rather than through a broker. You may go to the fund house’s branch and fill out the mutual fund registration form with the necessary information, such as your name, mobile number, and bank account information.

Completing your KYC by sending self-attested copies of your identification and address evidence and two passport-sized pictures are required. The initial amount is payable by cheque, and you will be assigned a PIN and folio number once the check has been received. 

You may make an online equity fund investment by going to the mutual fund company’s website. To apply online, you need to provide your PAN and Aadhaar numbers. With your banking account, you may begin investing in a mutual fund strategy.

Online procedure to invest in mutual funds via SIP

• For mutual fund investments, you must first finalise your KYC. Do it online by filling out the KYC application form and uploading your self-attested ID and address evidence to the KRA (KYC Registration Agency).
• The next step is to go to the fund house’s website and choose a mutual fund plan that interests you.
• You may generate the login information and then fill out a registration form with the necessary information, such as name, phone number, and PAN.
• Following that, you provide your bank account information and specify the amount of the SIP auto-debit.
• You may access your mutual fund scheme by logging onto your fund house-created account.
• The first SIP payment must be made online, and the subsequent payment must be made within 30 days. (You will be notified of the required date by the AMC.)
• You may continue with the SIP until the specified duration expires. (The SIP’s duration is entirely up to you.)

How to invest in mutual funds with a lump sum?

With an asset management provider, you may set up a direct mutual fund investment plan. In terms of investing, you can go offline or online. As part of your KYC, you will need to provide identification and proof of residence, including two passport-sized photos, to your local mutual fund branch. Investments in mutual funds may be made via an online platform.  It’s then up to you how much money you want to invest in a mutual fund and how often you want to invest.

Mutual fund investment through Demat account

There are many ways to invest in mutual funds, including via your stock broker’s Demat account or any institutional participant. Mutual fund units will be kept in dematerialized form. Like shares, mutual fund schemes may be bought and sold using your Demat account. Equities such as stock and mutual funds may be held in this digital account.

• Open a stockbroker Demat and trading account.
• You may acquire and sell mutual fund units.
• Charges, on the other hand, are greater than those associated with other methods of investing in mutual funds.

What is the best way to invest in debt mutual funds?

You may invest directly in debt fund plans via an asset management company. You may fill the application form in person at their branch office. The KYC process is then completed by providing self-attested identification and address verification documents, and passport-size pictures. 

The AMC’s website allows you to direct investments in debt mutual funds via the internet.

• Sign up for AMC membership.
• Submit your PAN and Aadhaar numbers to complete your eKYC.
• Set a budget and a reinvestment schedule for the quantity and frequency of your investments.
• You may direct your bank to transfer a certain amount of money to the fund house on a specific date by submitting an online request.

What is the best way to put money into STP mutual funds?

Using an STP, you may transfer (switch) a specified number of units between mutual funds within the same mutual fund company regularly. Depending on the current market circumstances, you may also want to contemplate an STP from an equity to a debt plan. STP investments may be made in mutual funds by following these steps:

• You may complete the STP form and send it to the AMC’s office. You may fill out this form digitally at the mutual fund house’s website.
• Choose a mutual fund plan (destination fund) you want to invest in long-term.
• After that, you may choose the mutual fund plan (source fund) into which you wish to put the lump money.
• You must choose the period during which the lump sum investment may be transferred to the target fund. You may choose daily, weekly, or monthly STPs to suit your needs.

How do minors invest in mutual funds?

It is possible to make mutual fund investments in the name of a minor kid. The minor kid is the only person who owns the mutual fund folio in question. Parental authority or a court-appointed caretaker must be designated as the custodian of the mutual fund portfolio.

You may go to the office of an AMC and ask for assistance.

• When forming a mutual fund folio, you must provide documentation proving the child’s date of birth, such as a passport or birth certificate. Aside from that, you’ll need paperwork to prove the existence of a link between the minor kid and the parent or guardian. (For example, a parent’s passport may be required, while a guardian’s certificate of the judicial order may be required.)
• To make investments in the name of a minor kid, the parent or caretaker must be KYC-compliant.
• A minor child’s mutual fund folio may even have a SIP or STP directive added to it if the parent allows it. It would, however, come to an end whenever the minor kid reached the age of adulthood.

How can a short-term investor invest in mutual funds?

Depending on your financial goals and risk tolerance, you may want to explore mutual funds. Invest in debt funds to assist you in meeting your short-term financial objectives. You may invest in debt mutual funds directly via the mutual fund firm either locally or online. On the other hand, you may make recurring investments in debt funds via a mutual fund provider.

What is the best way to invest in gold through mutual funds?

Gold ETFs and gold funds may be purchased online or via a mutual fund provider. A mutual fund provider can also assist you in investing in these funds. Gold funds and Gold ETFs may also be purchased using the SIP technique. You’ll have to fork up Rs 500 each time you pay.

How to invest in retirement mutual funds?

ELSS mutual funds and equity mutual funds may be used to save for retirement. Long-term financial objectives like retirement planning can only be achieved by long-term investments in equity funds.

Direct equity fund and ELSS investments may be made via an asset management business. However, if you like to invest in mutual funds regularly, you may choose to use a broker.

How can a student invest in mutual funds?

If you are a college student at least 18 years old, you are eligible to invest in mutual funds. The AMC can help you invest in mutual fund direct plans. Through a broker, it is also possible to invest in mutual funds with regular programmes.

A self-attested ID and address evidence and two passport-sized photos must be submitted to the mutual fund institution branch to complete the KYC process, including verifying your identity and residence. To participate in mutual funds, you must conduct eKYC online by providing your PAN and Aadhaar information.