Compounding Benefits: Starting Rs 5,000 SIP at 20, 25, 35? Here’s how much funds you can accumulate at retirement
A mutual fund calculator can help you find the best mutual funds and you can also monitor the fund progress from time to time.
Compounding interest in mutual funds allows investors to earn interest on their investments and reinvest the money, earning further income over time. The compounding effect of SIP investments generates revenue not just from the initial investment but also from the successive interest received.
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SIP Investment
In SIP, investors should invest a fixed amount every month or quarterly for a long period to get compounding interest benefits.
Mutual fund calculator
A mutual fund calculator can help you find the best mutual funds and you can also monitor the fund progress from time to time.
What if you withdraw money in short-term
Withdrawing money from SIP in the short term will not provide you full benefits of compounding interest.
Flexibility in SIP
However, SIP investment makes you a regular investor but if you are going through some financial issues, you can adjust the amount as per your budget.
What is the rupee cost averaging in SIP?
SIPs allow you to purchase more units when the net asset value (NAV) is low and fewer units when the NAV is high.
How can SIP make you a disciplined investor?
Since your money gets automatically deducted, it makes you invest regularly.
Types of SIP
There are three types of SIPs:
Top-up SIP
Flexible SIP
Perpetual SIP
Starting SIP at 35?
Do you think, you are late to start an SIP investment? If yes, don't worry. A regular investment in SIP till your retirement age can still give you a huge amount in 25 years.
Investing Rs 5,000/month can give you this much at retirement
Suppose you start investing Rs 5,000 per month at 35 age and do this till 60. This way, you can accumulate Rs 94,88,175. This includes Rs 15,00,000 invested amount and Rs 79,88,175 returns on your investment.
Investing Rs 5,000/month at 25
Suppose you start investing Rs 5,000 per month at 25 age and do this till 60. This way, you can accumulate Rs 3,24,76,345. This includes Rs 21,00,000 invested amount and Rs 3,03,76,345 returns on your investment.
Investing Rs 5,000/month at 20
Suppose you start investing Rs 5,000 per month at 20 age and do this till 60. This way, you can accumulate Rs 5,94,12,101. This includes Rs 24,00,000 invested amount and Rs 5,70,12,101 returns on your investment.
Disclaimer: Investing in mutual funds is subject to market risks. Consult your advisor before making any investment.