A mutual fund calculator helps you compare growth with dividend plans in one go. In India, the dividend plan is now called Income Distribution cum Capital Withdrawal, or IDCW.
Both plans can hold the same assets, but still the cash flow, NAV and tax part can look different. So it makes sense to run a check and see if the plan actually matches what you want.
What Is a Mutual Fund Calculator?
A mutual fund calculator is basically an online tool. You key in the sum, the term, and the expected return. Then it shows the amount paid, expected gain, and the end value.
Just keep in mind, it’s an estimate. Mutual funds follow market movement, so returns are not truly fixed. Use it more for planning, not like a guarantee.
How a Growth Plan Works
In a growth plan, the scheme keeps the gains invested. The interest merely compounds, allowing you to buy more units of the fund. The NAV may rise as the fund grows. You only get cash if you sell units. Then tax may kick in, depending on the fund type and the holding term.
How an IDCW Plan Works
IDCW is the current name for the dividend plan. The fund house may pay out part of the scheme value as income, but the sum and the date are not locked in.
After payout, the NAV drops by that payout amount, aside from normal market changes. The cash isn’t extra profit, it comes out from the plan value itself.
IDCW income is generally taxed according to the investors income. For a growth plan, the tax is paid when you sell the units. The exact rule depends on the fund type, how long you hold, and the current law.
How to Compare Both Plans
Use these steps in a mutual fund calculator, but do not skip the “same inputs” part.
Step 1: Use the Same Amount: Enter the same lump sum or monthly SIP for both plans. So each option starts from the same place.
Step 2: Use the Same Term: Choose one term, like five, ten, or fifteen years. Keep it the same for growth and dividend plans.
Step 3: Use the Same Return Rate: Now set one expected yearly return rate for both plans. That way the comparison stays fair.
Step 4: Check the Growth Plan: Run the tool as if all gains stay invested. Note the amount, the expected gain, and the ending value.
Step 5: Check the IDCW Plan: If the tool allows, set a likely payout sum. If it does not, then list each cash payout, and also the value left in the plan.
Step 6: Add Both Parts: Add all IDCW payouts to the ending unit value. That gives a view of the full value created during the full term.
Step 7: Check Tax and Cash Use: Look at the tax on IDCW, and also tax on selling growth units. Also see what you do with each payout, like whether you spend it or re-invest it into the plan.
A Simple Example
Say you invest ₹1,00,000 in a fund for ten years, and you use an expected return of 10% per year.
For the growth case, all gains stay in the plan. The mutual fund calculator might show an end value around ₹2,59,000.
Now take the IDCW plan, where it pays ₹6,000 each year. At the end, you add up all ten payouts to the unit value left in the plan. Then subtract the tax you paid. This gives a clearer view of both cash and remaining fund value.
Again, these numbers are for learning only. Actual NAV, payout, and returns can vary.
Where Bajaj Broking Fits In
Most brokers offer SIP tools and access to mutual funds through their online platform. Its SIP calculator lets you enter the monthly amount, term, and expected return. Then it shows the sum paid, expected gain, and end value.
These tools support planning, but they do not rate a fund, nor does it assure a return. Also read the scheme paper for risk, costs, exit load, plan terms, and IDCW rules.
What Else Should You Check?
Match the plan to your goal and your cash needs. A growth plan may work better for a long term goal where you don’t need cash during the term. IDCW may suit a cash flow need, but the payouts are not fixed.
Also check fund type, risk level, expense ratio, exit load, and the tax rule. Do not pick a plan just because a calculator output looks nice.
Conclusion
A mutual fund calculator can make the choice more clear. Keep amount, term, and return rate the same. For growth, check the end value. For IDCW, add the cash payouts and the unit value left. Then verify the tax impact and how you’ll use the cash.
Bajaj Broking’s calculator can help as a first check. The final plan should still fit your goal, cash need, risk level, and the scheme terms.
