Mutual Fund Calculator

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A Mutual Fund is an investment option where a group of investors pool in their money, to be collectively invested across stocks, shares, bonds and other securities. There is usually a fund manager who invests this money on their behalf and charges a small fee. This is an ideal investment option for people who are looking to invest their money but do not have the time to look for the right investment option.

What is a Mutual Fund Calculator?

Mutual funds are one of the most sought-after investment avenues. The mutual fund return calculator is a practical tool which you can use to calculate the returns a mutual fund investment could potentially generate.

CashZeni mutual fund calculator for returns is flexible and helps you accurately calculate the estimated returns. All you need to do is enter the amount you want to invest, tenure and the expected rate of returns. The online calculator will give you the projected mutual fund return details in a few seconds.

How does a Mutual Fund Total Return Calculator Work?

A mutual fund calculator is a practical financial tool that enables an investor to calculate the returns yielded by investing in mutual funds. In broad terms, there are two ways in which one can invest in mutual funds – one time & monthly.

SIP or Systematic Investment Plan is an avenue of investing in mutual funds. In a SIP, an individual invests a small amount every month on designated schemes. One thing to remember is that the NAV of such funds changes every month and the same amount of money can purchase a variable number of units in different months.

Imagine that you invest via SIP of Rs. 1000 for 12 months.  At the time of availing the SIP, the NAV of your chosen stock is Rs. 10. So, you can purchase 100 units of the stock in the first month. In the second month, the NAV increases to Rs. 20. Your 1000 rupees can now buy just 50 units of the same stock. 

An online SIP calculator predicts the returns on your SIP based on specific parameters. You simply need to input the SIP amount, the duration of investment and the expected rate of return, and the calculator will wield the results in seconds.

An investment is when an individual invests a substantial amount at one go in a particular scheme. One of the primary advantages of opting for one-time investment is that the change in NAV value does not affect the number of units you can purchase.

You need to input three essential data points; namely, your investment amount, estimated ROI and the duration of your investment.

What is the Mutual Fund Returns Formula?

You can use the below formula to calculate the lump sum amount of returns on investment:
M = P (1 + r/100)^n


M = amount you will receive at maturity,
P = principal amount you have invested,
r = estimated rate of return you earn on your investment, and
n = holding period in years.

For example, if you have invested ₹6,00,000 for 10 years at an estimated rate of return of 12%, using the formula the estimated return would be ₹18,63,509. 

How to Calculate Mutual Fund Returns?

The mutual fund calculator takes three aspects into consideration that includes the amount invested, the expected rate of returns, and the tenure of the amount invested. Though you can manually calculate the mutual fund, the mathematics behind it can be quite cumbersome. Moreover, calculating mutual funds manually might not always guarantee its accuracy.

Alternatively, you can use the online calculator for mutual funds from CashZeni in the following three simple steps:

  1. Select the investment amount : Choose the amount you want to invest. You can use the sliding bar for selecting the investment amount
  2. Select the investment period : Next, you should enter the tenure for which you want to invest the amount. You can use the slide bar to do the same
  3. Select the return rate : Lastly, enter the expected rate of return on your preferred mutual fund. You can use the slide bar to do the same

The mutual fund calculator for estimated returns shall give you the results with the total amount invested, estimated returns and total value within a few seconds.

Types of Mutual Funds

Mutual Fund can be of various types, each suitable for different investment goals.

  • Equity (Growth) Funds – These are funds with their assets invested only in stocks. They grow faster than money market and fixed-income funds. Naturally, they also involve more risk.
  • Fixed-Income Funds – These are funds invested only in fixed-income securities. These funds pay a fixed rate of return, similar to government bonds, investment-linked corporate bonds and high-yield corporate bonds. These are considered safer investment options as the risk is less and the returns are usually consistent.
  • Balanced – These funds are invested partly in stocks and partly in fixed-income securities in order to maintain a balance between high returns and risk. The money is split among different investments. The risk is higher than fixed income funds, but still lesser than that of pure equity funds.
  • Money Market Funds – These funds are invested in short-term fixed income securities such as government bonds, treasury bills, commercial paper and certificates of deposit. They are considered a safe investment option, but with a lower potential return than other Mutual Funds.
  • Index Funds – These funds aim to track the performance of a specific index such as Sensex or Nifty. The value of the Mutual Fund fluctuates with the value of the index.
  • Sectoral Funds – These funds are invested in stocks belonging to specific sectors such as real estate, commodities, or companies that support social causes such as environmental welfare and human rights.
  • Fund-of-funds – These funds invest in other funds. They are similar to balanced funds, where they make asset allocation and diversification easier.

Lump Sum v/s SIP?

You can choose to invest in Mutual Funds via a single lump sum investment or smaller regular investments made periodically (weekly, monthly, or quarterly) known as SIPs. There are various advantages of choosing SIPs over lump sum. The investment required is low; investors can start as low as ₹100 per month. The power of compounding also ensures that interest earned from previous instalments are reinvested. SIPs also help create the habit of disciplined savings. However, when the market is down, lump sum investments may be preferred as it will earn higher returns.

Frequently Asked Questions

What is a Mutual Fund calculator?

A Mutual Fund calculator is a tool that helps investors estimate the potential growth and returns on their Mutual Fund investments. It allows users to input variables such as investment amount, duration, and expected rate of return to calculate the projected value of their investments.

How does a Mutual Fund calculator work?

Mutual Fund calculators utilize mathematical formulas and algorithms to compute the future value of investments based on the provided inputs. These calculations take into account factors such as compounding, investment duration, and the expected rate of return to generate accurate projections.

How does a mutual fund calculator help?

Mutual fund calculators provide a full estimate of investment periods of 1 year, 3 years and 5 years. Hence, it helps an investor with their financial planning.

What are the factors a mutual fund calculator takes into account to determine returns?

Different types of returns such as total return, absolute return, and annualised return are some factors that must be taken into account. However, it is not possible for a layman to be well-versed with these terms. A mutual fund calculator can be of immense help in such cases.

Are mutual funds a good investment?

Mutual funds are a good investment avenue for investors planning on diversifying their investment portfolios. These are a great investment option for investors who have a decent knowledge of how the investment markets work but do not want to directly invest in stocks.

How many mutual fund schemes are there in India?

According to the data SEBI released, there are 44 fund houses registered with the Association of Mutual Funds in India (AMFI) in India. These together offer more than 2,500 mutual fund schemes.

Do mutual funds carry negative returns?

Yes, mutual fund investments, just like other investment avenues come with a significant risk factor. However, with proper financial planning and assistance from experts and financial advisors, you can reduce the risk and maximise your returns.