Power of SIP: A Systematic Investment Plan, which is popularly known as SIP, is an investment method by which mutual funds allow their investors to invest in a disciplined or systematic manner. By using the SIP facility, an investor can invest a fixed amount of money at predetermined intervals in a mutual fund scheme. The instalment amount can be as low as Rs 100, while the pre-defined SIP intervals can be daily, weekly, monthly, or yearly. Investing in SIP can be a time-bound manner and may provide an opportunity for investors to build their investment over the long term due to the power of compounding and average costing.
Now, let’s understand with the help of calculations which would generate a higher corpus: a Rs 10000 monthly investment for 20 years or a Rs 30,000 monthly investment for 10 years.
Power of SIP: Rs 10000 monthly investment for 20 years
- Target corpus: ?
- Investment amount: Rs 10,000 monthly SIP
- Investment period: 20 years
- Annualised return: 12 per cent
Power of SIP: How much can Rs 10,000 monthly SIP build in 10 years?
In 10 years, the investment amount will be Rs 12,00,000, the estimated return in 10 years could be Rs 11,23,391, and the estimated corpus in 10 years could be Rs 23,23,391.
Power of SIP: How much can Rs 10,000 monthly SIP build in 20 years?
In 20 years, the investment amount will be Rs 24,00,000, the estimated return in 20 years could be Rs 75,91,479, and the estimated corpus in 20 years could be Rs 99,91,479.
Power of SIP: Rs 30000 monthly investment for 10 years
- Target corpus: ?
- Investment amount: Rs 30,000 monthly SIP
- Investment period: 10 years
- Annualised return: 12 per cent
Power of SIP: How much can Rs 30,000 monthly SIP build in 5 years?
In 5 years, the investment amount will be Rs 18,00,000, the estimated return in 5 years could be Rs 6,74,591, and the estimated corpus in 5 years could be Rs 24,74,591.
Power of SIP: How much can Rs 30,000 monthly SIP build in 10 years?
In 10 years, the investment amount will be Rs 36,00,000, the estimated return in 10 years could be Rs 33,70,172, and the estimated corpus in 10 years could be Rs 69,70,172.
Rs 10k monthly investment for 20 years vs Rs 30k monthly investment for 10 years
Thus, it is quite clear from the above calculations that Rs 10,000 monthly investment for 20 years could able to generate a higher corpus than Rs 30,000 monthly investment for 10 years.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
