Investment Amount Per Month (Rs)
Nummber of Years
Expected Annual Returns (%)

Fixed returns Vs Debt Mutual fund

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
Tax Calculation
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

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.

Mutual Fund

SIP or Systematic Investment Plan

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.

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