The article briefs about mutual funds, mutual fund calculator or the lump sum calculator.
Mutual Funds are investment schemes professionally managed by financial experts. Many investors, individuals, and entities invest money in these schemes or funds to generate better returns. These investment schemes could invest in equity or debt or a mixture of both. There are basically two ways of investing in mutual funds. One can invest a big chunk at once (lump sum) or invest small amounts regularly (SIP). Mutual Fund schemes are available in growth and dividend options. Within the dividend option, payout or reinvestment options are available. In the growth option of Mutual fund schemes, profits made by the scheme are invested back into it. The dividend option can re-invest (dividend reinvestment option) or pay out the dividends (dividend payout option) the profits made by the fund.
Mutual funds are usually Equity, Debt and Hybrid funds. Within equity, there are small, mid, large-cap, diversified and sector funds. In equity funds, there is a special category for tax saving known as ELSS funds. Within debt funds, there are money market, ultra-short, liquid plus and debt funds. In hybrid funds, there are equity hybrid and debt hybrid funds. The Securities and Exchange Board Of India (SEBI) regulates the Mutual Funds industry, and there are around 45 different Mutual Fund houses and more than 12000+ Mutual Fund Schemes.
Scripbox’s Mutual Funds Calculator
Scripbox’s Mutual Fund lump sum return calculator helps you to estimate wealth creation by making Lump Sum investment in a fund of your choice for the investment period specified.
Using the mutual fund investment calculator, you can build the following scenarios:
When you know the return that you are expecting:
Scenario 1: Using the lump sum calculator, enter the details like Return (%) that you are expecting, Initial Investment amount and Investment Period. Below example, shows you that you can earn Rs 1,74,204 upon investing Rs 15,000 for 15 years at 17.76%.
Scenario 2: If you know how much you would want at the end of 15 years, you can try the ‘Set a Target Amount’ option in the lumpsum calculator. To earn Rs 2,00,000 at the end of 15 years at 17.76% you need to invest Rs 17,300.
The above-given scenarios are just a few examples of the Mutual Fund Calculator. Try out the MF calculator with your own variables and know much you can earn at the end of your investment.
Advantages of Mutual Funds
Mutual Funds, historically, have proven to be much better investment avenues than other products available to investors. Investments in MF have proven to be more effective because of the following reasons:
- Managed by professionals: Financial experts invest in equity and fixed income products invest on your behalf. They are supported by large teams which assist them in analyzing data and dissecting nitty-gritty of the markets(macro and microeconomic environment, GDP rates, Interest rates, and its future outlook, fundamental analysis into each company that they invest or not invest in) which clients as individuals might not be able to do themselves.
- Better taxation structures: The government of India offers incentives to customers to invest in mutual funds by providing tax structures. So while your fixed deposit returns are completely taxable, Investment in debt mutual funds come with tax indexation benefits (which can lower your tax burden to almost as low as 2% as opposed to as high as 30% in Fixed deposits). Investments in equity mutual funds have only 10% tax (on gains withdrawn above ₹1 lakh in a year) compared to 30% taxation on FDs. Gains on equity mutual funds withdrawn up to ₹1 lakh in a year are exempt from tax.
- Better Flexibility: Mutual funds are held in units. So you can always redeem your investment partially while keeping the other investment intact and untouched. This is unlike fixed deposits where you have to fully withdraw your investment and pay pre-mature withdrawal charges on the entire amount.
- Better liquidity: Open-ended mutual funds can be sold anytime. This is unlike investment like Insurance, PPF, NSC, etc. where you have long lock-in periods and large pre-mature withdrawal penalties.
- Better Diversification: Mutual funds invest in multiple securities. This diversifies the risk for you much better than other investments.
How to invest in Mutual Funds?
Investors have to provide documentation mandated by SEBI to get Know Your Client (KYC) registration. This KYC registration can be done Online and Offline. Once the KYC is registered with the SEBI registered entities, investors can start investing in Mutual Funds. This is a one-time activity. Once KYC is registered, Investors can start investing in Mutual Funds through any of the intermediaries.
How can I invest in Mutual Funds through Scripbox?
Once your KYC is done, and you have registered on our platform, you can invest in Mutual Funds. Either through a Lump Sum (One Time) or Systematic Investment Plan (SIP).
For Lump Sum investments, you would need to transfer money from your Bank account through our Payment gateway.
For SIP (Systematic Investment Plan) investments, once you have placed the order through our platform, you will need to activate your mandate so that the payments are processed automatically. There are two ways you can set up your mandate:
- If you are investing from the listed banks, then you can instantly link your bank account using internet banking.
- We will send you a bank linking form you will need to sign it and send it to us. This allows our payment gateway to deduct money from your bank account automatically based on your instruction. Scripbox’s logistics partners would collect the form from your home/office and send it to your bank for registration. Once the mandate is registered (it typically takes 2-3 weeks for the Bank to register the mandate), on a specific date (you can choose the week of the month through our platform), funds would be auto-debited from your account and the investment done in the mutual fund scheme of your choice.
Best Mutual Fund for Lump Sum Investment
Best mutual funds to invest lump sum amount and earn high returns are:
Long Term Wealth – Equity Funds
|Funds||Returns (5 years)|
|Mirae Asset Large Cap Fund (G)||18%|
|Invesco India Growth Opportunities Fund (G)||2.18%|
|Kotak Standard Multicap Fund (G)||19%|
|AXIS Bluechip Fund (G)||5.52%|
Short Term Wealth – Debt Funds
|Funds||Returns (5 years)|
|Tata Liquid Fund (G)||7.58%|
|Kotak Savings Fund (G)||7.93%|
|ICICI Prudential Savings Fund (G)||8.27%|
Tax saver Plan – ELSS Funds
|Funds||Returns (5 years)|
|Mirae Asset Tax Saver Fund (G)||-0.42%|
|Motilal Oswal Long Term Equity Fund (G)||13%|
Emergency Fund – Liquid Funds
Use the Scripbox’s mutual fund returns calculator to find out how much can you earn with your mutual fund investment.