|Fixed returns||Debt Mutual fund|
|Investment @ 1st year|
|Investment @ 1 year||1000000||Investment @ 1 year||1000000|
|Interest @ 7% 1 year||70000||Capital Gain @ 10% 1 year||100000|
|(-) tax 30 %||21000||Tax on 1 year||0|
|Net Velue @ end of 1 year||1049000||Value at end of 1 year||1100000|
|Investment @ 2nd year|
|Investment @ 2 year||1049000||Investment @ 2nd year||1100000|
|Interest @ 7% 2 year||73430||Capital Gain @ 10% 2 year||110000|
|(-) tax 30 %||22029||Tax on 2 year||0|
|Net Velue @ end of 2 year||1100401||Value at end of 2 year||1210000|
|Investment @ 3rd year|
|Investment @ 3 year||1100401||Investment @ 3 year||1210000|
|Interest @ 7% 3 year||77028||Capital Gain @ 10% 3 year||121000|
|(-) tax 30 %||23108.421||Tax on 3 year||0|
|Net Velue @ end of 3 year||1154320||Value at end of 3 year||1331000|
|Total Tax Paid in 3 years||66137|
|Total Capital gain||331000|
|Capital Gain Tax @ 20 %||66200|
|Total Interest gain over 3 years after tax||154320||Total Interest gain over 3 years after tax||264800|
|Net value||1154320||Net value||1264800|
You saved Rs 110479 in 3 years after investing in Mutual Fund than Fixed Deposite
Mutual fund is nothing but collection of stocks or bonds that a professional Fund Manager buys on behalf of you. Fund Manager decides which stock or bond to buy and how much. A mutual fund then distributes the entire investment amount in small units (called units). Investors can buy these units instead of buying stocks directly.
Eg - Say you and three of your friends decide to buy a piece of land that is sure to go up in value. None of you can buy that on your own, So you 4 decide to buy that land putting your own share, After some years when the price of that land appreciates by say 50%, all 4 of you decide to sell it and divide the profits among you. Mutual funds work in a similar manner.
SIP or Systematic Investment Plan is one of the best ways of investing your money. SIP's start the process of wealth creation where a small amount of money is invested over regular intervals of time and this investment being invested in the stock market generates returns over time.
SIP's are usually considered to be a good way to invest money since the investment is spread out over time, unlike a lump sum investment which takes place all at once. The amount required for starting a SIP is as low as INR 500, thus making SIP’s a great tool for smart investments, where one can start investing small amount from a young age.
A Systematic Investment Plan or SIP is a smart mode for investing money in mutual funds. SIP allows you to invest a certain pre-determined amount at a regular interval, like every month.
SIP calculator makes use of only a few data for estimating the returns of your investment.
Here are some simple steps that an individual needs to follow while using the SIP calculator:
Step 1: Input the SIP amount that you wish to invest into a certain investment plan. There are different investment limits for different investment companies. You can make yourself aware of the same and then make the desired investment.
Step 2: This step involves the estimation of the possible rate of return on the investment. This estimation is done depending on the track record of the particular fund in the past few years.
Step 3: This step is concerned with the investment tenure. It is vital to decide the exact period of time that you would like to stay invested in a particular investment plan. The different SIPs allow the investors a minimum tenure of 6 months. However, to expect higher returns, it is advisable to stay for a longer period or tenure.