Sip calculator: If you want to make a fund of Rs 10 lakh, then there may be a better way than FD in SIP bank for this. But the big question is, how much money will have to be invested every month and for how many years? The answer to this question depends on how much you can invest every month and how much is the annual return on your investment.
What is SIP and why is it better?
SIP is an easy way to invest in systematic investment plan, mutual funds. In this, you invest a fixed amount every month and this amount is invested in the stock market through mutual funds. The advantage of SIP is that you can gradually create a large fund, and the impact of market fluctuations is average.
How long will 10 lakh rupees be made?
Equity mutual funds have an average of 12% annual return in the long term on SIP. Now let’s see how long will you get Rs 10 lakh from ₹ 1,000, ₹ 3,000 and ₹ 5,000 month SIP:
| Monthly sip | Estimated time | total investment | Estimated return | Total value |
| ₹ 1,000 | 21 years | ₹ 2.52 Lakh | ₹ 7.48 Lakh | ₹ 10 Lakh |
| ₹ 3,000 | 12 years 3 months | ₹ 4.41 Lakh | ₹ 5.59 Lakh | ₹ 10 Lakh |
| ₹ 5,000 | 8 years 10 months | ₹ 5.30 Lakh | ₹ 4.70 Lakh | ₹ 10 Lakh |
Note: This calculation is estimated and subject to market risks. The actual returns may be different.
Can it be less time?
These calculations are based on an estimated annual return of 12%. However, real returns may be different. If you consider low returns (such as 10%), the number of years will increase slightly. However, you can make good funds for your children’s education, home down payment or retirement through SIP.
Keep these 5 things in mind
While doing SIP (Systematic Investment Plan), keep these 5 things in mind:
Set goals: Before starting SIP, decide for which goals you are investing. Such as buying a house, children’s education, retirement. This will help in choosing the right fund and duration.
Long -term perspective: The real advantage in SIP comes from compounding, which grows over time. Keep a perspective of at least 5–10 years so that the impact of market volatility is reduced.
Choose the right fund: Prior to investment, check the previous performance of the fund, risk profiles and reputation of fund manager. Choose equity, hybrid or date funds according to your risk tolerating ability.
Do not be afraid of fall: The advantage of SIP is that you invest a certain amount every month, whether the market is up or down. This reduces the average cost, so do not worry about market fluctuations.
Regular review of sip: Review your SIP portfolio every 6–12 months. Change funds as per need or increase SIP amount. But avoid making changes again and again.
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Disclaimer: Here information provided is being given only for information. It is necessary to mention here that the investment market in the market is subject to risks. Always consult experts before investing money as an investor. There is never advice to anyone to invest money on behalf of Moneycontrol.