Mutual Fund SIP Investment: These 5 Benefits Are Available In Investment Know Before You Invest Money
SIP – Mutual Fund SIP Investment: These 5 benefits are available when investing, know before you invest – Mutual Fund SIP Investment: Mutual Fund SIP is an investment option, which allows you to achieve stock-like returns even if you save regularly. If you make a habit of investing your small savings every month, you can easily build up a corpus of lakhs of rupees for years to come. Investing in SIP has many advantages. Let us know about 5 such benefits…
flexibility in investments
SIP has flexibility in terms of duration and amount. This means that you can choose the duration and money of the investment as you see fit. Like you can opt for a monthly, quarterly or semi-annual option. You can start SIP with a minimum of Rs.
Investing through SIP is a habit. You invest a fixed amount over a certain period. That is, you have a well-disciplined investment.
You can start, stop or exit SIP as you wish. You can withdraw money from your SIP whenever you want.
Advantages of SIP
The benefits of participating in SIP are enormous. SIPs are usually done from a long-term perspective. The longer your investment, the greater the benefits of compounding.
Benefits of Rupee Average Cost
One of the advantages of SIP is that the investor gets the benefit of rupee cost averaging. This means that when you invest periodically (usually monthly) in a fund, you build up units at different prices (the so-called net asset value or NAV). (Note: This information is based on interviews with experts.)
Investing in mutual funds can be done in two ways. The first way is to put all the money into the plan at once. Second, invest every month through SIP (Systematic Investment Plan). The facility in SIP is that you can invest at least Rs. You can start investing from one of the main advantages of holding a SIP for a long period of time is compounding. Suppose you start a monthly SIP of Rs.5,000, then let’s see how much projected corpus you can build in 10, 15 and 20 years.
12% long-term return
Looking at the long-term returns of mutual fund SIPs, there are several schemes in which investors have achieved an average return of 12 percent. So, if you do a monthly SIP of Rs 5,000 and get an annual return of 12 percent, check the returns over 10, 15 and 20 years.
10 year return
According to the SIP calculator, if you invest Rs 5,000 every month for 10 years and get an annual return of at least 12 percent, you will create an estimated corpus of Rs 11.6 lakh. The total investment will be Rs 6 lakh and the financial profit will be Rs 5.6 lakh.
15 year return
According to the SIP calculator, if you invest Rs 5,000 every month for 15 years and get at least 12 percent annual returns, you will have an estimated corpus of Rs 25.2 lakh. The total investment will be Rs 9 lakh and the financial profit will be Rs 16.2 lakh.
20 year return
According to the SIP calculator, if you invest Rs 5,000 every month for 20 years and get at least 12 percent annual return, you will create an estimated corpus of Rs 50 lakh. The total investment will be Rs 12 lakh and the financial profit will be Rs 38 lakh.
Make it a habit to invest in SIPs regularly
AK Corporation, director of BPN Fincap says that SIP is a well-planned way of investing. Regular SIP investments are a habit. Investing also involves discipline. There are many funds with an average long-term SIP return of 12 percent and above. Investors run no direct market risk in investment funds. Also, the returns are higher compared to the traditional product. However, this investment involves indirect risks and market volatility affects the fund’s performance. Therefore, an investor should make an investment decision based on their income, goals and risk profile.