People have now come to know about the benefits of long -term investment in mutual fund scheme. But, a question often occurs in the mind of the investor- which of the lump and lump sum investment is more beneficial? Experts say that this question is only in the mind of such investors that can invest in the mutual fund scheme in both ways. It is not possible for most people to invest in a lump sum amount of mutual fund scheme. However, they can invest a certain amount every month for a long time. This is the reason that today most people are investing in a mutual fund scheme from SIP.
The longer returns of investment duration
Experts say that mutual funds (Mutual fund) In equity scheme Sip From or lump sum investment (Lumpsum investment) Investing in both ways gives good returns. Only one thing has to be kept in mind that the longer the investment duration is, the higher the return. The reason for this is compounding. Many people call it Magic of Compounding. This increases your money very fast. Get very good returns in 10-15 years.
Return on investing in SIP every month
This can be understood by an example. Suppose you invest Rs 5,000 every month in the equity scheme of mutual funds. If you invest for 10 years, then your total investment will be 6 lakh rupees. If it is accepted a return of 12 per cent annually on this, then after 10 years your money will increase to Rs 11,20,179. This means that you have invested a total of Rs 6 lakh, on which you have received a return of Rs 5,20,179 in 10 years.
Return for investing outright
Now we assume that you have a lump sum investment money. This means that you invest Rs 6,00,000 at a time in the equity scheme of mutual funds. You are going to invest this for 10 years. If the annual return is assumed 12 per cent, then after 10 years your Rs 6,00,000 will increase to Rs 18,63,509. This means that you have earned a return of Rs 12,63,509 in 10 years on an investment of Rs 6 lakh. It can also be said that your money has been tripled in 10 years.
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Who is more beneficial for you?
It is clear from both examples that you get more returns by investing lump sum. But, the truth is that it is possible for few people to invest lump sum of large amounts. It is easy for most people to make Rs 5,000-7,000 every month. Even if you invest Rs 5,000 every month from SIP, you get great returns in 10 years. Such a return is not possible in the bank’s FD or any other financial assets.