News India Live, Digital Desk: Sip Calculator: The most important thing to get more benefit in any investment is to give up time. When it comes to investment in mutual funds, this rule becomes even more important. The best thing about mutual funds is that you can easily invest in it through a systematic investment plan (SIP). It gradually allows you to prepare big capital by depositing small amounts.
SIP is a way in which a certain amount is deducted from your bank account every month and invests in mutual funds. It has become a very popular method of investment in India.
Investing for a long time through SIP, you get the benefit of compounding. Compounding means that the interest received on your initial investment is re -interest. This increases your capital rapidly.
For example, if you invest only ₹ 100 (monthly ₹ 3000) at the beginning of your career through SIP, you can prepare a large fund until retirement. Suppose you are 25 years old, and you invest ₹ 3000 SIP every month for the next 35 years. As your income increases, your SIP also increases by 10% every year.
It is believed that an average of 12% returns on investment are received annually. In such a situation, the breakdown of investment will be something like this:
- initial investment: ₹ 3000 per month
- Investment duration: 35 years (from the age of 25 to 60 years)
- Annual growth: 10% increase in SIP every year
- Estimated annual return: 12%
Total details of investment:
- total investment: ₹ 97,56,877
- Estimated return: ₹ 4,35,43,942
- Total amount (till retirement): ₹ 5,33,00,819
This means that you can prepare a big fund of more than ₹ 5 crore till retirement from just ₹ 3000 monthly SIP, which is increased slightly every year. This is the power to convert small savings into large capital.
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