SIP Calculator: It is hard to believe that an investment of Rs 4,20,000 can add up to Rs 65 lakh because no one can even imagine that such a return can be obtained in any scheme. But this is possible through SIP.
In SIP you get the benefit of compounding interest and its average return is considered to be 12 percent which is much better than any other scheme. In such a situation, you can add big money for your future even by doing SIP of very small amount. Let us tell you how you can convert an investment of ₹ 4,20,000 into Rs 65 lakh through SIP.
This is how Rs 4,20,000 will become Rs 65 lakh
To earn huge profits through SIP, you will have to invest Rs 1000 every month. The amount of Rs 1000 is so small that even those earning a normal salary of Rs 10,000 or Rs 20,000 can easily save this much money. You will have to continue this investment continuously for 35 years i.e. start investing from the age of 25 and continue it till the age of 60.
If you invest Rs 1000 every month through SIP in mutual funds for 35 consecutive years, then you will invest a total of Rs 4,20,000. But the compounding interest at 12 percent in 35 years will be Rs 60,75,269. In this way, on the 60th year, you can get Rs 64,95,269 (about Rs 65 lakh) by combining the invested amount and interest amount.
Keep this in mind
Investment is made in mutual funds through SIP, which is market linked, hence it is subject to risk. There is no guaranteed return in the market. In such a situation, returns cannot be guaranteed even in SIP mutual funds. But most financial experts believe that in the long run the average return of SIP can be up to 12 percent. Sometimes it has been seen that even 15 and 20 percent are available. This much return is not available through any other scheme. This is the reason why despite market risks, people’s interest in SIP has increased significantly in the last few years.
