A mutual fund calculator is a practical financial tool that permits individuals to compute the returns earned on their mutual fund investments. This tool helps to predict the overall returns on the maturity of the scheme, given the principal investment amount and expected rate of return. It takes into account both the investment routes, i.e., SIP or Systematic Investment Plan and Lumpsum mode.

For good measure, some mutual fund return calculators also provide the option to adjust the returns against inflation to offer a more realistic picture.

How does a mutual fund return calculator help you?

An MF return calculator can be immensely helpful in the following ways:

1. A mutual fund calculator offers you with the estimated returns for the entire duration of your investment. You may calculate your investments’ 1 year, 3 years, and 5 years returns using the mutual fund calculator.
2. It is a tool that is available to all investors at free of cost. It is very easy and convenient to use, i.e., even a layperson can use it with relative ease.
3. Mutual fund return calculators offer reasonably precise returns on your mutual fund investments. However, you should be mindful that as mutual fund investments are subject to market risks, you cannot predict the returns with pinpoint accuracy.
4. A mutual fund calculator helps investors to plan and successfully manage their finances in a better way once they have an expected idea of the future value of their investments.

How does a mutual fund calculator work?

As mentioned above, a mutual fund return calculator will give you the investment value at maturity by calculating the returns on your mutual fund scheme according to your investment horizon. You can adjust the variables of the calculator such as the amount of investment, the duration of SIP, the expected rate of returns, SIP/lump sum, and frequency of SIP.

When we talk about mutual fund investments, one of the most essential aspects is the expected returns on the investment. A mutual fund return calculator helps to reveal the same.

How to invest in mutual funds online?

There are various avenues from where an investor can purchase mutual fund units:

1. Direct Plans – You can directly approach the AMC [Asset Management Company] and invest in the direct plan of your choice. Investors who invest in mutual funds via this route enjoy low expense ratio as AMCs don’t charge distributor commission. Hence, as an investor, you can earn a better rate of return.
2. Mutual fund Distributor – You can also contact a registered mutual fund distributor. The designated person will help you out to complete the requisite documentation. If you invest via this route, you will be charged a distributor’s commission
3. Online – There are several third-party portals available online to investors. You can visit one of them and invest in different types of mutual funds by paying a nominal fee.

Mutual fund investments and direct stock market investment [or shares] are two very distinct financial products that are often misinterpreted as identical investment option. Investors often face the dilemma of deciding where to invest their hard-earned money. Mutual funds or stocks?

This article aims at providing a mutual fund investment guide and solving this dilemma.

How mutual funds are better than direct investments in stocks

Here are a few reasons why investing in mutual funds is a better investment option than direct investments in stocks:

Professional Management

One of the key reasons why investors prefer to invest in mutual funds is to leverage the expertise and knowledge of a mutual fund expert – fund manager to earn substantial returns.

Investment in stocks without prior experience and knowledge about the working of the financial markets can prove to be catastrophic. This can easily result in exhausting one’s savings. Hence, experts often advise investors to invest in mutual funds online if they do not have a thorough knowledge of the markets and desire to keep their money in safe hands.

Diversification

Unlike a direct investment in stocks that invest in individual equities, mutual fund investments strive to invest in multiple asset classes to hedge the investment portfolio during volatile market conditions. Thus, mutual funds help to diversify the portfolio while mitigating one’s risk profile.

Convenience

Purchasing and selling stocks entails ample time and formalities, something that is absent in mutual funds. In case of mutual fund investments, these formalities are done by the AMC [Asset Management Company] or the fund house that manages the fund, for which they charge a nominal fee. What’s more, mutual funds do not necessitate an investor to regularly monitor and time the market. An investor can easily put their capital in mutual fund schemes for a long time and earn decent returns.

Tax-Saving Benefits

When it comes to stocks, income generated from equity investment is taxable at the hands of the investor. Additionally, there are no tax benefits. However, there are a few types of mutual funds that allow an individual to avail tax-saving benefits. ELSS (Equity-Linked Savings Schemes) are tax saving mutual funds that are eligible for a tax deduction of up to Rs 1.5 lac u/s 80C.

Overseen by the market regulator

Unlike stocks, mutual fund houses are subjected to certain restrictions and scrutinies by the national market regulator- SEBI [Securities and Exchange Board of India].

Where should you invest?

Mutual funds or stocks? Which one is the ideal investment option? There is no right answer. Mutual fund investments provide us with peace of mind when compared to stocks. Still, stocks have the potential to generate exceptionally higher returns than mutual funds.

Lastly, it goes without saying that the best returns would be generated when the investors stick to their investments for the long term. Whether you decide to go forward with mutual funds or stocks, entirely depends on your financial goals, investment horizon and risk profile. Happy investing!

Investments for several individuals are just allocating funds in tax-saving investments to save tax under Section 80C. However, the newer tech-savvy generation has started considering investing in different life insurance plans or mutual funds that can help them to attain financial freedom.

Gen Y and Gen Z constitute the people that fall in the age group of 27 to 37 years of age. Millennials represent about 34 percent of the Indians and precisely 47 percent of the workforce. Their approach towards investments is quite different from their preceding generation, as Millennials tend to evaluate their investments from a technological point of view. Hence, being a financially and technologically literate generation, millennials opt for online channels for their investment decisions.

Investors are often bombarded with different investment options for their portfolios. One of the biggest dilemmas faced by them is choosing between insurance and ELSS mutual funds. Before we understand the right investment option for your portfolio, let’s quickly recall what ELSS funds are.

What are ELSS mutual funds?

Equity-Linked Savings Scheme, also known as ELSS [Tax-Saving Mutual Funds], are investment securities that invest a majority of their corpus [at least 80 percent of their assets] in equity and equity-related instruments. ELSS offers dual benefits of tax-saving attributes and capital appreciation.

Keys aspects to consider before choosing from different types of investment

Financial Goals

Indeed, an insurance policy is a vital component of a portfolio for any as it covers the financial security of your children, parents, or dependents. Mutual funds are a useful tool to meet one’s long-term financial goals, such as paying for higher studies, buying a house, starting a business, etc.

Returns

If an insurance policy is solely utilized for investment purposes, it is not only expensive but also does not promise spectacular returns as in the case of mutual fund investments. However, new insurance plans are consumer-friendly, paired with more substantial insurance rewards and returns for shifting times.

In addition to mutual fund schemes offering the option of fund diversification, one can also maximize their returns without having to depend entirely on a single mutual fund for growth.

Liquidity

If we talk about liquidity with respect to mutual fund investments, except with ELSS funds,  these securities provide high liquidity. One should note that ELSS funds have a lock-in period of 3 years, one of the lowest as compared to different Section 80C investments.

One should also consider the tax aspects of their investment options. The premium paid towards an insurance policy is subject to tax deduction up to the maximum limit of Rs 1.5 lac. Further different policies offer tax benefits under Section 80C and Section 80D of the Income Tax Act, 1961. ELSS tax-saving funds also offer tax benefits of up to Rs 1,50,000 under section 80C of the IT Act. An investor can save up to Rs 46,800 by investing in these tax-saving mutual funds.

Conclusion

The decision to invest in mutual funds or insurance policies entirely lies with the investor. Before investing, an investor should analyze their investment needs. The right investment option is one that aligns with your financial goals, investment horizon, and risk profile.

Happy investing!

Mutual Funds is a pool of funds collected from several investors used to invest in a number of securities such as bonds or capital raising instruments in the money market such as share equity. These funds are managed by experienced professionals known as fund managers. Fund managers prepare a diversified portfolio and to build a capital out of your invested fund along with other investors.

Think of it this way – If you buy a unit of a mutual fund, it would mean that you are buying a unit of the asset or portfolio prepared by the mutual fund company. Therefore, buying a unit of a mutual fund is not the same as acquiring the stocks of a listed company.

There are a number of advantages of investing in mutual funds. A mutual fund is a service that gives you a wide variety of sectors to invest in without having to exhaust yourself with research overload of individual stocks of different companies in different sectors.

Advantages of investing in mutual funds

1. Diversified Portfolio

A diversified portfolio will always save you from unforeseen downfalls of any sector. For instance, imagine you have a portfolio with investment in industry, real estate and energy sectors. Now, if in a particular quarter, the real estate sector takes a sudden hit and energy sector happens to flourish.

A diverse portfolio of that sort will not only save you from the losses incurred but also, you might be able to take advantage of the thriving energy sector. Thus, one of the benefits of mutual funds is that you can easily find diverse portfolios and gain superior returns.

2. Economies of Scale

We have come a long way from using old school filament bulbs to the new LED bulbs. Ever wondered how did these become so cheap that even the poorest households have LED bulbs to save power consumption?

This is an example of the economies of scale wherein with larger investment and greater production, you can bring down the ‘cost of production’. Thus, by pooling funds from several investors, mutual funds employ the fundamentals of economies of scale. The volume of their transactions helps save the cost of transactions.

3. Divisibility

An individual stock-picker can buy several stocks of lesser value in a company at once and be left with an odd sum of money in his account, while the advantage of investing in mutual funds is that your fund can be allocated to create an asset consisting shares of higher values instead of having to wait for several months, save and then invest.

4. Lastly, another perk is the professional management of your investment. The fund managers invest the funds into only a thoroughly researched portfolio.

So, besides considering the above advantages, you should still consider exploring more to understand your risk appetite. This approach will aid you in choosing the right funds to achieve your investment goals.

Systematic Investment Plan (SIP) is a means to invest in mutual funds. It is an investment strategy where an individual invests a specific sum of money in their desired mutual fund schemes at stipulated intervals for a pre-determined period of time. Investing in mutual funds via SIP helps investors to take part in the share market, without actively striving to time the market.

This is because they are benefitted by a concept called rupee cost averaging where you end up buying varying units of the scheme at different market levels. They end up buying more units when the markets are down and vice-versa.

Another benefit of SIP investments is the power of compounding they offer. When you invest for a long period, your returns are further invested to earn returns on them. In short, your money works to make more money. Power of compounding is claimed to be the eighth wonder of the world by several experts. It helps an investor to build a significant corpus over time that helps to achieve long-term financial goals with small, regular contributions.

SIP investments are a popular investment vehicle as they are quite flexible. Apart from offering the different types of SIP to investors, they also provide the flexibility to choose periodicity of the investments. As an investor, you can invest in mutual funds via SIP daily, weekly, monthly, quarterly, semi-annually, annually, etc. according to their convenience. Though the most popular option of investing in mutual funds is a monthly SIP, investors can customise the way they make SIP investments.

So what should you choose – daily SIP or monthly SIP?

An investor who has selected a monthly SIP will purchase mutual fund units on a specific date of each month at different prices. So, when markets are costly, the investor ends up buying lesser units than when the market is cheap. This way, in the long run, the overall cost of purchasing mutual fund units will average out.

On the other hand, daily SIPs average out an investor’s risk through the month and the overall investment period. The daily SIP option works for those individuals who earn daily wages or have a daily cash flow, as daily SIP would help them to invest in a disciplined manner.

Hence, a monthly SIP option could have a higher risk factor as compared to daily SIP investment option. However, one should note that this risk factor enables a higher return from their initial investment. What’s more, though the daily SIP investment option might minimize volatility, it will unnecessarily increase the number of transactions in your investment portfolio which might get quite difficult to manage.

Irrespective of the fact that you invest in SIP using the daily option or the monthly option, you can use an SIP calculator to understand the future value of your investments. Happy investing!

An employee-employer relationship in every workplace must be one that should be devoid of any friction, for such conflict can deteriorate your business and can lead to right talent drifting away.

Here are the ten things every employer should do for their employees to ensure the business fruition into success.

1. Flexibility in working –  Keeping a strict 9-5 work hour policy can drastically affect the productivity of your employees. A lot of companies are understanding the importance of flexibility and are offering varied work timing and work from home facilities.

A survey showed that  84% of working parents prioritized flexible working hours as the most important factor in a job. Flexibility also reduces stress and increases the mental well being of the employee. It helps employees work during their optimum productive hours as opposed to general work time.

2. Commitment to the health and overall well being of the employee – A healthy employee is a happy employee. Providing a group mediclaim insurance policy for employees would help them worry less over their hospitalization and health-related expenses. Employers must also go above and beyond just the physical well being.

Mental wellness should also be part and parcel of the organisation. Wellness programs, stress relief activities can be often integrated into the working hours to help better workers cope with the demands of the organisation.

Read more: Seven reasons why health insurance is a must!

3. Supporting innovation – Employees do not just see their work as a means for sustenance. Their work should challenge them to pick their brains, ideate and come up with new solutions. This would take out the mundanity from doing the same type of work every day. It would also help them push their limits and work with a team to achieve a common goal.

Read more: Why do employees leave organizations?

4. Recognizing and rewarding your employees – Most companies fall short when it comes to recognizing the hard work put in by the employees, all the while handing out constructive criticism. While constructive criticism is important, the scale should also be balanced with recognition and rewards. You can either acknowledge them personally or through awards.

Read more: How to rightly manage your employees

5. Prioritizing work-life balance – Employers cannot expect employees to toll their life away in the office. Not enough time for a personal life can create discord in the office. Create a steady and reliable work environment where employees have a forehand idea of what their day-to-day work would be. Encourage vacation, short breaks through the day, and a safe space for mental rejuvenation. 

6. Promoting career pathway – Create training opportunities for employees to advance their learning skills. Expose them to different realms of work to better channel their aspirations. Do not limit them to one skill alone. Have career discussions and keep your employees aware of various other career paths within the company.

7. Transparency and honesty – If you receive feedback and surveys from your employees, be transparent and honest about how you have dealt with them. Choose to acknowledge the failings in your part as much as the successes. Be honest with your employees on the areas of improvement and how you intend to tackle them.

8. Positive work environment – Bad office politics can be the death of every company. Communicate clearly and offer a safe space for employees to tell you their feelings. Prioritize your employees and their concerns over business outcomes. Good talent can wither away if not offered the right soil to grow in.

9. Offer extra perks than the common basics – Rather than just an insurance policy, offer other perks like concert tickets, day outs, team lunches, team building activities to improve the total morale of the company. A once in a while break from daily office routines can do wonders to the employees.

10. Communicate the company statuses with employees – Schedule monthly meetings and communicate where the company stands with regards to business output and the rooms for improvement.

Keeping your employees in the dark will close the doors to their innovative solutions that could help you better the places where your business is lacking.

Term Life Insurance provides financial support and reduces uncertainties in business and human life. The policy provides safety and security against a particular event. There is always a fear of sudden loss. Insurance provides a cover against any sudden loss.

The life insurance coverage depends upon a few factors such as your current annual income, financial future liabilities, financial goals, your age at the time of purchase, and several other such responsibilities. However, before getting a term life insurance policy, you’ll have to figure out the right plan for you.

What is Term Insurance

Term Insurance is an agreement wherein an insurance company agrees to pay a specified amount after the death of an insured party as long as the premiums are paid and up to date. Policies give insured persons the assurance that their loved ones will be financially secured even after their death.

Choosing a Term Insurance Plan

• Family And Work Situation

Your insurance requirements will be influenced by your family situation, your age, your health situation and whether you are an owner or self-employed individual. Getting insurance is important, whether you are single or in a relationship. In the event of your death, your loved ones will have to pay off any financial liabilities you have.

In addition, they may also have to bear some of your shared responsibilities, such as your credit card fees, your car payment, mortgage payment, or any other payments. If you buy term insurance coverage, your debts will not be a burden for your family members and they can fulfil such financial obligations with ease.

• Life Insurance

A Term Life Insurance Policy is an effective financial tool, it lets you ensure you and your loved ones’ providing financial security in bad times. An unfortunate event like a sudden death of the breadwinner of the family could have a major impact on the financial conditions of the family.

It is best to start thinking about it now and get a policy that will let you cover your needs as a self-employed person and will avoid future concerns for your family.

a. Life Goals – Your personal, family and professional goals will also determine your choice of life insurance plan. This will help you evaluate how much life insurance you need to take out to protect your loved ones in the event of death.

b. Type of Coverage Required – Whether you want an insurance coverage that generates liquidity and surrender value whenever you require or a long term lock-in period tenure. Once you make a decision, you will be well equipped to choose the term insurance plan that works best for you. You can also take the help of a financial security advisor to guide you based on your requirements and direct you to life insurance that meets your needs.

What is a Term Plan Calculator?

A term insurance calculator is an online calculator that helps in calculating the amount of premium payable under the term policy. You would have to mention your age, the coverage that you need, the term of the plan, for how long you want to pay the premium, the frequency in which the premiums would be paid based on your occupation, medical history, etc.

These details will directly affect the calculation of your insurance premium and give you the final premium payable.

How much term life insurance do I need?

A large part of selecting a life insurance plan is by determining how much money your dependents will require. One basic rule of thumb is that the death benefit on your insurance policy should be equal to seven to 15~20 times the amount of your annual salary. The reasonable amount suggested by insurance providers for an insurance policy is six to 10 times the amount of buyer’s annual salary.

Who doesn’t know what ULIP is? A Unit Linked Insurance Plan is a product provided by numerous insurance companies that, gives financiers benefits of both insurance and investment under a single integrated plan.

Despite knowing the basics of a ULIP plan, some of us have been read or informed about some myths. In this article, we will debunk those myths and clear your way to get a ULIP plan.

1. Myth – ULIPs are expensive than most investment products

Truth – ULIP policies were expensive way back in 2008. But times have changed and Fund management fees have reduced significantly, and so have the premium charges.

India’s insurance regulator [IRDAI] has capped costs of gross yield for policies with a duration of up to 10 years and 2.25 percent for those above ten years. Hence, charges and commission in ULIP plans have significantly decreased.

2. Myth – Market instability affects ULIP life cover

Truth – Life cover in ULIPs remain unaffected despite market fluctuations.

Since ULIPs are usually linked to the equity market, some policyholders believe that the sum assured would decrease if the market is down trending. This, however, is another misunderstanding.

Despite a bear market, the life cover remains unchanged even if the fund values hit an all-time low. In the case of the investor’s death, ULIPs reward the entire life cover or the fund value, whichever is higher in value.

3. Myth – ULIPs do not give good returns

Truth – ULIPs offer insurance cover and cannot be linked to pure investment options

Most people compare ULIP plans to pure investment vehicles and hence do not realise that this comparison cannot be valid. ULIPs offer insurance cover, something that no other pure financial investment product offers.

Given these advantages, you’d understand that the returns they provide are quite competitive. If you have an investment horizon for more than 5-7 years, then there is no better product then ULIPs.

4. Myth – ULIPs are risky as they are associated with equity markets

Truth – In the case of ULIPs, you can select your investment based on the level of your risk appetite and the amount of money you have.

ULIPs let you choose funds with different investment objectives while providing you with the option to select the kind and level of risk you are willing to take. Depending on your risk appetite and conditions, you can choose a conventional fund or a top-performing fund.

For example, an investor in his 20s with few financial responsibilities would be a more significant risk-taker and will choose fast-growing funds like equity. On the other hand, an investor nearing his retirement might choose a non-aggressive tactic such as a debt fund.

5. Myth – ULIPs cannot be yielded before maturity

Truth – ULIPs can be surrendered after a defined period.

This common myth surrounding ULIPs is false. As a policyholder, you have the option to surrender the policy after a determined period, which is usually five years from the start of the ULIP product.

People have preferred ULIPs for years. But, some misconceptions about them lead to the negativity around ULIP policies. Now that we have debunked some of them make sure you research, analyse and invest in the best ULIP plan that suits you.