Investment is a proven method to increase wealth with higher return rates over the years. But when it comes to choosing a suitable plan or even options within a plan, people can have confusion. These are mostly due to the complexity of the plan and have nothing to do with the investor’s expertise or experience. A great method to avoid such errors in calculations and selection of plans is taking the help of an investment calculator. Read on to know more about this investment calculator, its functioning and its major benefits.
Image Source: Shutterstock
What Is an Investment Calculator?
An investment calculator is a tool that helps investors plan their investment in any investment plan. Several banks and financial companies have such an investment calculator on their website. Mostly investment calculator refers to the insurance sector where a person can calculate their insurance investments through its resources. With its help, a potential customer can calculate the investment in the company’s products or any investment in general. They can provide detailed information on suitable investments, returns, risks, budget, and feasibility of the plan within the investor’s financial condition.
How Does an Investment Calculator Work?
An investment calculator usually takes personal data from the investor and shows personalized results. The common data required are total income, total expenditure, assets, preferred investment choices, investment duration. Maturity amount, etc. After knowing all these data, the calculator provides results in the form of suitable plans which can provide the required returns from the received input. The investor then has the liberty of choosing any plan which suits them. And if the website belongs to the investment plan provider, they can directly move ahead with purchasing the selected plan.
Top 6 Benefits of Using an Investment Calculator
There are several benefits of using an investment calculator and the major one being the self-reliance the user enjoys. They don’t need to visit agents or financial advisors to know more about investment plans and their details. Any user can directly use the investment calculator and see how the benefit of each plan without a mediator, resulting in cheaper products. Given below are six other equally important benefits of using an investment calculator.
The user inputs all the data in the investment calculator to get personalized results. Such personalized results help the user see how each plan can fit into their budget. The customer always has to go with plans designed for a certain category in other conventional methods. Such plans are too general and don’t have provisions that give importance to the financial restraints of the customers.
Maximized Tax Savings
An investment calculator shows the best investment plans for income tax savings. It also shows various schemes and investments with huge tax deductions, which can help save a lot of money. The calculator also clarifies how investing in a plan under the name of a person belonging to a particular category can maximize returns. For example, child plans, girl child plans, and investments for women and senior citizens have maximum tax relaxations. So the calculator shows how creating a plan under a family member in this category can help you gain more returns from the same plan.
Image Source: Shutterstock
Exact Calculations on Budget and Target
Another advantage that an investment calculator provides is the exact calculations. These calculators are backed-up with databases, codes or AI, enabling accurate calculations. So when a user inputs the budget and target of the plan, the calculator returns the exact amount of premium or investment in all the plans in the results.
Methods Of Risk Mitigation
These investment calculators also show the investors the methods of risk mitigation. These are mainly seen in stock markets or securities investment calculators where investors choose products to invest money in. The calculator shows them the correct method of investment allocation into different products with different risk levels. By doing so, the chances of loss become extremely low when the market dips or when any product fails to perform as expected.
Considerations For Inflation
Another great benefit is how the results of the investment calculator consider the inflation rate. While showing the resultant maturity amount, most calculators also show the projected inflation rate and its effect on the maturity amount. As most investment plans are for long-term purposes, inflation can drastically reduce the gains. It is good to use the results from the calculator to modify your plan to ensure high returns even after deductions based on inflation rates.
Online And Free
One of the most basic advantages that such an investment calculator provides its users is it is completely free and available online. This is more than enough to attract more users to calculate their investment method through the calculator. And most calculators are also very simple to use as there are no tough steps involved and only requires numeric input in some fields.
These are solid reasons promoting the advantages of investment calculators to the unversed. You must take the assistance of an investment calculator if you plan to invest in any investment plan, especially insurance plans. Max Life Insurance, a major insurer in India, also has a similar calculator – Savings And Investment Calculator. This calculator has several of the qualities mentioned above to benefit the user. SO visit their official website to use this free investment calculator from Max Life Insurance today itself.