SIP Compounding Returns: Corpus of Rs 3.4 crore, monthly SIP investment 20,000; in how many years, you can achieve goal
SIP (Systematic Investment Plan) allows you to invest small amounts regularly in mutual funds. With a monthly investment of Rs 20,000, you can achieve a corpus of Rs 3.4 crore in 24 years.
A Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds by contributing a fixed sum regularly. The key benefit of SIPs is the power of compounding, where your investment grows over time, leading to significant returns. By investing Rs 20,000 monthly at an expected return rate of 12%, you can accumulate a corpus of approximately Rs 3.4 crore in 24 years. SIPs offer a systematic approach for achieving long-term financial goals while mitigating market volatility risks.
Disclaimer: This is not investment advice, do your own due diligence or consult an expert for financial planning.
SIP - Systematic Investment Plan
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Definition: SIP is a method of investing in mutual funds.
- Investors choose a mutual fund scheme and invest a fixed amount at regular intervals.
Definition: SIP is a method of investing in mutual funds.
Investment Strategy
- Instead of a one-time large investment, SIP involves investing smaller, periodic amounts.
- This approach can lead to a higher return over time due to compounding.
How Does SIP Work?
Process:
Upon applying for an SIP plan, the specified amount is automatically debited from your bank account.
This amount is invested in the chosen mutual funds at the set time intervals.
Allocation
- Units of mutual funds are allocated based on the fund's NAV at the end of each investment period.
- Additional units are added with each SIP investment based on market rates.
Compounding Benefit
The reinvested amount grows with each cycle, resulting in larger returns.
Withdrawal Options
Withdrawal Options:
- Investors can choose to withdraw returns at the end of the SIP tenure or at specified intervals.
Monthly SIP Investment Details: Rs 20,000
Investment Details:
- Monthly investment: Rs 20,000
- Expected return rate: 12%
- Time period: 24 years
Estimated Returns
- Total invested amount: Rs 57,60,000
- Estimated returns: Rs 2,76,93,743
- Total corpus: Rs 3,34,53,743
Time Required to Achieve Goal of Rs 3 Crore Corpus
Duration: 24 years