SIP Investment: If you want to create a fund of Rs 10 lakh, then SIP is a better option. Let us know how much time it will take to create a fund of Rs 10 lakh through SIP. Also, how much money you will have to invest in mutual funds every month.
SIP Calculator: If you want to create a fund of Rs 10 lakh, then SIP can be a better way than FD in the bank. But the big question is how much money will have to be invested every month and for how many years? The answer to this question depends on how much you can invest every month and what is the annual return on your investment.
What is SIP and why is it better?
SIP i.e. Systematic Investment Plan is an easy way to invest in mutual funds. In this, you invest a fixed amount every month and this amount is invested in the stock market through mutual funds. The advantage of SIP is that you can gradually create a big fund, and the effect of market fluctuations is averaged.
When will it take to make Rs 10 lakh?
SIP in equity mutual funds is considered to give an average return of 12% per annum in the long term. Now let’s see when it will take to make Rs 10 lakh from SIPs of ₹1,000, ₹3,000 and ₹5,000 per month:
| Monthly SIP | Estimated Time | total investment | Estimated Returns | Total Value |
| ₹1,000 | 21 years | ₹2.52 lakh | ₹7.48 lakh | ₹10 Lakh |
| ₹3,000 | 12 years 3 months | ₹4.41 lakh | ₹5.59 lakh | ₹10 Lakh |
| ₹5,000 | 8 years 10 months | ₹5.30 lakh | ₹4.70 lakh | ₹10 Lakh |
Note: This calculation is approximate and subject to market risks. Actual returns may vary.
Can the time be more or less?
These calculations are based on an estimated annual return of 12%. However, real returns may vary. If you assume a lower return (eg 10%), the number of years will increase slightly. However, you can create a good fund for your children’s education, down payment of a house or retirement through SIP.
Keep these 5 things in mind
While doing SIP (Systematic Investment Plan), keep these 5 things in mind:
Decide the goal: Before starting SIP, decide for which goal you are investing. Such as buying a house, children’s education, retirement. This will help in choosing the right fund and period.
Long term perspective: The real benefit in SIP comes from compounding, which increases with time. Keep a view of at least 5–10 years so that the effect of market volatility is reduced.
Choose the right fund: Check the past performance of the fund, risk profile and reputation of the fund manager before investing. Choose equity, hybrid or debt funds according to your risk tolerance.
Don’t be afraid of the fall: The advantage of SIP is that you invest a fixed amount every month, whether the market is up or down. This reduces the average cost, so do not worry about market fluctuations.
Regular review of SIP: Review your SIP portfolio every 6–12 months. Change the fund or increase the SIP amount as per the need. But avoid making frequent changes.
Disclaimer: The information provided here is for information purposes only. It is important to mention here that investing in the market is subject to market risks. Always consult an expert before investing as an investor. BusinessLeague never advises anyone to invest money here.
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