In an economic market as diverse as India, investment plans of all kinds are evolving into becoming as customisable and flexible as possible. Investors today, are actively looking for capital growth that thrives over an extended period of time, with assured monetary stability. The best investment plans are built on high interest margins, high liquidity, and customisable growth and payout patterns. Plus, you can easily calculate your long-term returns using tools such as a return on investment calculator.
Investment plans are a reliable methods to build one’s financial corpus over a determined time-period, suited as per the policyholder’s necessities. Investment plans, from short term investment plans to long term investment plans; follow a basic pattern where the investor makes nominal premium payments into a fund, where these accumulate over time.
Return on Investment
The main feature that most investors seek to keep in mind as the determining factor for their ideal investment plan is the return on investment margin offered by a particular plan. Return on investment or ROI can be defined as the percentage or metric that calculates the net gain earned from an investment plan against the premiums/investments made. It is a crucial metric, as it helps an investor determine how their investments have accumulated under a plan.
With the evolution of different investment solutions in the Indian market, a parallel emergence of resources and tools to help potential policyholders choose plans has also been prevalent. A return on investment calculator is one of the most reliable ways to find the best investment solutions, including long-term and short-term investment plans and visibility for a potential investor; in a manner that is tailored to their requirements and capacities.
How Does a Return on Investment Calculator Work?
A return on investment calculator is an algorithm based simulation that helps a potential investor judge the profitability of a particular investment plan. The returns may be calculated across various tenures to gauge the most beneficial outcome. The calculations are made on the basis of the investment amount, the investment tenure and the sum assured from the plan. Using these three fields across the formula, the return in investment calculator calculates the total gain from an investment plan. One can also calculate the Compounded Annual Growth Rate of a plan using a return on investment calculator.
Tools like a return on investment calculator, investment calculators and ULIP calculators can be greatly useful to potential investors to fund their ideal plan. Let us look at the benefits of using a return on investment calculator:
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1. Visibility on Projected Returns: Investing can be an intimidating process for many, since there is an abundance of options for people across all income brackets it can become challenging to understand the best returns on investment offered under each plan. Therefore, a return on investment calculator is that it allows the investor to map out their ideal return requirement and helps them see the projected return on investment percentage for the particular plan. This can help them choose the plan best suited to their needs.
2. Flexible: Since it is an algorithm-based programme that can be used by anyone, an investment calculator has fields that have to be filled in by the investor to be able to reflect the investor’s returns. A standard ULIP calculator or investment calculator has fields for age, financial goals, current investments, and budgets, while a return on investment calculator has fields for the investment amount, the sum assured and the plan tenure. Hence is it flexible to calculate a return on investment percentage for any plan required.
3. Independent: An investment calculator is designed to streamline the process of policy selection by allowing the potential investor to map out their investment projections in advance, before approaching an investment provider or financial advisor. It is independent and seamless.
4. User-friendly: As aforementioned, an return on investment calculator is designed to be used by anyone hence it is designed to have a very approachable user-interface which only requires minimal data entry from the investor’s end and calculates returns on the basis of that data.
5. Free of Cost: Consultation with financial advisors to simply navigate through personal details to find an investment plan can be a supplementary cost. A return on investment calculator can be found online or on an investment provider’s website, to be used for free.
6. Compare Plans: A return on investment calculator like a ULIP calculator helps a potential policyholder fund the ideal mutual funds with best performance over a particular time period. One can use the return on investment calculator to gauge their ideal percentage across a variety of plans, with different risk margins and payout periods. It can also be used to calculate the worth of investment against the market benchmark of most plans.
A return on investment calculator is an excellent online resource tool. Plus, it is crucial to the process of tracking one's investment gains, as it shows a person’s projected investment return percentage against the person’s chosen investment amount. It mitigates all possibilities of missed metrics as it helps them see a projected gain amount on the basis of their investment.
Since it is also free of cost, it also removes all redundant consultation fees and allows the investor to consider all factors before investing, making it an efficient tool for the potential policyholder to find the plan with maximum return on investment percentage.
