SIP is directly linked to the stock market, so there is a lot of risk in it. But, despite the tremendous risk, the common people of the country are investing in it on a large scale. Today we will learn here how a corpus of Rs 3.5 crore can be created from a SIP of Rs 10,000.
SIP is an effective medium to invest in mutual funds. A large corpus can be created by investing in SIP for a long period. On one hand, SIP gives the benefit of attractive returns of the market, on the other hand, compounding increases your returns. However, SIP is directly linked to the stock market, so there is a lot of risk in it. But, despite the tremendous risk, the common people of the country are investing in it on a large scale. Today we will learn here how a corpus of Rs 3.5 crore can be created from a SIP of Rs 10,000.
If you get an annual return of 12 percent, then in how many years will a fund of Rs 3.5 crore be ready
While investing in SIP, if you get an average estimated return of 12 percent every year, then in 30 years you can prepare a fund of Rs 3.5 crore. This Rs 3.5 crore includes your investment of Rs 36,00,000 and an estimated return of Rs 3,16,99,138. Similarly, if you get an average estimated return of 15 percent every year, then in 26 years you can prepare a fund of Rs 3.8 crore. This Rs 3.8 crore includes your investment of Rs 31,20,000 and an estimated return of Rs 3,51,30,245.
Keep these things in mind while investing in SIP
While investing in mutual fund SIP, you should take special care of some important things. First of all, you should know that SIP never gives fixed returns. In SIP, you can get a return of 20 percent or even a negative return of -10 percent. You also have to pay long term capital gains tax on the total return received through SIP. In such a situation, your total corpus may reduce. This year, the central government has increased the long term capital gains tax from 10 percent to 12.5 percent.
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