Keep these things in mind while investing in SIP
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, you get the benefit of attractive market returns in SIP, on the other hand, compounding adds to your returns. However, SIP is directly linked to the stock market, hence 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 with a SIP of Rs 10,000.
If you get 12 percent annual return, in how many years will a fund of Rs 3.5 crore be ready?
If you get an average expected return of 12 percent every year while investing in SIP, then you can create a fund of Rs 3.5 crore in 30 years. This Rs 3.5 crore includes your investment of Rs 36,00,000 and expected return of Rs 3,16,99,138. Similarly, if you get an average expected return of 15 percent every year, you can create a corpus of Rs 3.8 crore in 26 years. This Rs 3.8 crore includes your investment of Rs 31,20,000 and 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 keep some important things in mind. First of all, you should know that you never get fixed returns in SIP. In SIP you can get a return of 20 percent and can also get a negative return of -10 percent. You also have to pay long term capital gains tax on the total returns 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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