SIP: A successful and secure financial future can be attained via prudent investing. The systematic strategy to building wealth through mutual funds known as the Systematic Investment Plan (SIP) is one of the most successful investment strategies. Investing a certain amount on a regular basis over time allows SIP to take advantage of compound interest to significantly increase your wealth. Let’s examine in more detail how a little SIP investment can provide impressive profits across a variety of time periods.
Understanding SIP Returns Over Time
Here’s a breakdown of how an SIP of ₹3,000 per month can accumulate over various durations, assuming an expected annual return of 15%:
| Duration | SIP Amount (₹) | Future Value (₹) |
|---|---|---|
| 5 years | 3,000 | 2.7 Lakhs |
| 8 years | 3,000 | 5.6 Lakhs |
| 10 years | 3,000 | 8.4 Lakhs |
| 12 years | 3,000 | 12.1 Lakhs |
| 15 years | 3,000 | 20.3 Lakhs |
| 18 years | 3,000 | 33.1 Lakhs |
| 20 years | 3,000 | 45.5 Lakhs |
| 22 years | 3,000 | 62.1 Lakhs |
| 25 years | 3,000 | 98.5 Lakhs |
| 28 years | 3,000 | 1.6 Crores |
| 30 years | 3,000 | 2.1 Crores |
| 35 years | 3,000 | 4.5 Crores |
Explaining the Wealth Accumulation
The table shows the power of compounding over time. With a 15% annual return and a ₹3,000 monthly investment over 35 years, you could potentially amass an incredible ₹4.5 Crores.
Wealth Growth Analysis
Let us consider an investor who invests ₹12.6 Lakh (₹3,000 per month for 35 years) and builds up ₹4.5 Crores of wealth over 35 years. The dissection would be as follows:
- Expected Amount: ₹4,45,81,935 (4.5 Crores)
- Amount Invested: ₹12,60,000 (12.6 Lakhs)
- Wealth Gain: ₹4,33,21,935 (4.3 Crores)
This demonstrates the enormous financial benefit that may be attained through long-term, focused investing.
SIP vs. Other Investment Options
Let’s examine how the interest rates of well-known small savings plans in India compare to SIP returns:
- Sukanya Samriddhi Account Scheme: 8.2%
- Senior Citizen Savings Scheme: 8.2%
- National Savings Certificate (VIII Issue): 7.7%
- Kisan Vikas Patra: 7.5%
- Mahila Samman Savings Certificate: 7.5%
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
