Compounding interest benefits: How much do you need to invest in monthly SIP to accumulate Rs 10 crore retirement corpus if started investing at 21? Calculations inside
SIP has so many benefits. Among all, 'compounding interest' is the most beneficial which helps grow your money. The other benefits are rupee cost averaging, convenient investing method, cost-effectiveness, and others.
Mutual fund investors use a systematic investment plan (SIP) to invest a set amount of money in mutual funds regularly. The most used SIP is the monthly SIP, which invests a certain amount in your preferred mutual fund on a specified day each month.
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SIP benefits
SIP has so many benefits. Among all, 'compounding interest' is the most beneficial which helps grow your money. The other benefits are rupee cost averaging, convenient investing method, cost-effectiveness, and others.
Is SIP a good or long-term financial goal?
It can be a good choice for investors having long-term financial goals as compounding interest shows its magic over a longer period.
SIP: Minimum and maximum investment
An investor can invest a minimum of Rs 100 and there is no upper limit.
SIP: Tax benefits
If SIP is made in certain mutual funds like ELSS, it offers tax benefits. It is better to check with your financial advisor if you want to do a SIP for tax-saving purpose.
Compounding interest in SIP
SIPs can let your money grow tremendously over time due to compounding interest.
Types of SIP
- Top-up SIP
- Flexible SIP
- Perpetual SIP
SIP investment: Factors to consider before starting SIP investment
- Investment goals
- Scheme performance
- Risk appetite
- Expenses
Invest this much in SIP to accumulate Rs 10 crore retirement corpus
If you start investing at 25-year age, then you have 30 years to invest till retirement.
Compounding interest: Here's how to make a corpus of Rs 10 crore at retirement
Monthly SIP: Rs 9,500
Annual return: 12%
Duration: 39 years
Total investment in 39 years: Rs 44,46,000
Maturity amount: 10,00,69,932
Disclaimer: Investing in mutual funds is subject to market risks. Consult your advisor before making any investment.