How does the Mutual Fund Returns Calculator account for dividends in mutual funds?

A Mutual Fund Returns Calculator typically accounts for dividends by adding them to the total returns. When you invest in a mutual fund, you may receive dividends based on the fund’s performance, which can be reinvested or distributed to you.

When using the calculator, you should input:

• The total amount of dividends received during the investment period.
• Whether the dividends were reinvested back into the fund or taken as cash.

If you invested ₹1,00,000 in a mutual fund that paid out ₹10,000 in dividends over the year, the calculator would include this amount in your total return calculation.

This ensures a more accurate representation of your investment's performance over time. Accurately accounting for dividends is crucial since it can significantly enhance total returns, especially in funds that focus on income generation.