Investments in mutual funds are one of the best methods to enhance your overall economic growth. When discussing mutual funds, an SWP calculator can never be left behind. A systemic withdrawal plan calculator is a financial tool that helps us calculate the return earned on a particular investment. It is thus an essential part of your investment plan as it helps you to choose the best financial investment plan by calculating the best-earned returns.
Factors to Consider in a SWP Investment
- Sufficient Investing Amount– You should plan well and possess a sufficient principal amount to invest. It is because having a sufficient amount will help you cope with regular withdrawal amounts without actually worrying about the major invested amount. A systemic withdrawal plan calculator will instantly give you the final amount you will earn after an investment of the said amount.
- A Balance Between Investment and Withdrawal– Taking out a greater amount of money as compared to the investment amount is something that is not desirable. There should be a subtle balance between the both. The investor should also be aware of their investment period. It is during the investment period, that they will balance their withdrawal time and frequency. This will help in maintaining a stable income source. An SWP calculator will also be the saviour here, as it will give you the exact amount you can withdraw within your investment time horizon.
- Trust the Professionals– Investments can possess various market risks due to which your returns on the investment might be affected. This is where professional advice becomes a useful treasure. They will be the best person to guide you to the potential SWP goals and also make you understand the risks associated with the investment made in the mutual funds.
The Equity-Linked Savings Mutual Fund scheme helps investors invest in primary equity products with an investment period of a minimum of three years. There are many positive aspects of investments in ELSS Mutual Funds.
- Excellent Benefit of Taxes– ELSS Mutual Funds can help many people who are directly associated with retail business ventures. It helps them save a huge portion of their income from getting under taxes and also helps them gain maximum returns.
- Small Investment Tenure– It is also advantageous for employed people to invest in ELSS mutual funds. As compared to their official provident funds or pension scheme, ELSS mutual funds allow them higher returns in a short lock-in period which is a minimum of three years. Investments in ELSS mutual funds are also said to be less risky as compared to other investment platforms.
Although there are also some risks associated with the ELSS mutual fund investment, like the market price of the shares may drop significantly causing risk on the invested amount, but still their advantages outweigh the risks. Some issues may arise due to inadequate volume of the stocks due to which the investor might not be able to sell them at the right time, but the ELSS Mutual Funds come with the benefit of a sustainable withdrawal system. Therefore, the investor will get higher, tax-saving returns within a short period.
Also Read: Why Investing in Mutual Funds Makes Sense for Diversification?
