In mutual fund investment, investors can benefit from the power of compounding and rupee cost averaging by investing a fixed amount regularly through SIPs. A systematic investment plan (SIP) is the simplest way to invest in mutual funds. This is the best option for first-time investors and salaried individuals who are looking to invest a fixed sum every month. However, investors choose funds according to their risk appetite, investment goals, and investment horizon. They can also increase the SIP amount as and when possible. This method is also called step-up SIP.
In this article, we will calculate what your investment could grow into in 10 years, 15 years, and 20 years if you make a Rs 10,000 monthly SIP in mutual funds. Let’s take a look:
Rs 10,000 monthly SIP
If an individual invests Rs 10,000 per month for 10 years, the investment could grow to Rs 22,40,359 at an assumed return of 12 per cent, show calculations. The total invested amount would be Rs 12,00,000, while the estimated returns would be Rs 10,40,359, assuming an annualised return of 12 per cent.
See calculations of Rs 10,000 monthly SIP for 10 years
Invested amount – Rs 12,00,000
Estimated returns – Rs 10,40,359
Investment period – 10 years
Total value – Rs 22,40,359
Calculations of Rs 10,000 monthly SIP for 15 years
Invested amount – Rs 18,00,000
Estimated returns – Rs 29,59,314
Investment period – 15 years
Total value – Rs 47,59,314
Calculations of Rs 10,000 monthly SIP for 20 years
Invested amount – Rs 24,00,000
Estimated returns – Rs 67,98,574
Investment period – 20 years
Total value – Rs 91,98,574
FAQs
Should I stop SIP during market corrections?
No, it is not advisable to stop your SIP during market corrections. It allows investors to accumulate more mutual fund units at lower prices.
Should I do a step-up SIP later?
Yes, you can increase your investment amount whenever you can to get more benefits of compounding.
Is there a minimum period to invest in SIP?
No, there is no time limit to stay invested. However, one should consider a long term goal.
Can I pause SIP for some time?
Yes, you can pause your SIP for some time and restart it whenever possible.
Can I withdraw money anytime from the SIP?
Yes, most open-ended mutual funds allow investors to withdraw money at any time. However, there may be an exit load as per the fund manager’s conditions.
Do I need to do KYC before starting an SIP?
Yes, KYC is mandatory before you start investing in mutual funds.
Is there a maximum limit to invest in mutual funds?
No, there is no maximum limit on investing in mutual funds through SIP.
Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.