If If you want to save money for your child’s education, marriage or construction of a house after 20 years and are looking for a better option for investment, then mutual fund SIP can be a great option for you. According to AMFI data, mutual fund SIP has given huge returns to investors for a long time. Although, there is a lot of stock market risk in it, but common people of the country are now investing in SIP on a large scale. Here we will know how much SIP will have to be done to create a fund of Rs 1 crore in 20 years.
SIP returns depend on many factors
The returns from SIP depend on 4 main things. The first is for how many years you have to invest, the second is how much money you have set a target to deposit, the third is how much money you will invest and the fourth is what percentage of return you are getting. It may be in the hands of investors to implement the first three things but the fourth thing i.e. returns is not in anyone’s hands. The returns received in SIP completely depend on the movement of the stock market. But, the longer you do SIP, the more benefit you will get from compounding.
A fund of Rs 1 crore can be created with a SIP of Rs 7000.
If you get an estimated return of 12 percent every year, then a SIP of Rs 11,000 can create a corpus of Rs 1.09 crore in 20 years. On the other hand, if you get an estimated return of 15 percent every year, then a SIP of Rs 7000 can create a corpus of Rs 1.06 crore in 20 years. While investing in SIP, keep in mind that SIP never gives uniform returns and there are always continuous fluctuations in it. Therefore, to achieve your goal, invest as much money as possible in SIP for as long as possible as per your capacity.
