SIP: According to a report by Goldman Sachs that presents a “favourable scenario” for the Indian economy, the country’s services exports are expected to reach $900 billion by 2030, which translates to approximately 12.4 percent of its GDP.
When the economy is on the verge of substantial expansion, financial planning becomes essential. Over time, the Systematic Investment Plan (SIP) is a great instrument for building wealth. The idea of SIP, its possible returns over different time periods, and its comparison to other well-liked investing options in India will all be covered in this article.
Understanding SIP Returns Over Different Durations
Systematic Investment Plans are a disciplined approach to investing in mutual funds, which are particularly attractive because of their capacity to compound returns over time. Let’s look at the returns that SIPs can offer over various time periods, starting with a 17% annual return:
| Duration | SIP Amount (₹) | Future Value (₹) |
|---|---|---|
| 5 years | 4000 | 3.8 Lakhs |
| 8 years | 4000 | 8.2 Lakhs |
| 10 years | 4000 | 12.6 Lakhs |
| 12 years | 4000 | 18.8 Lakhs |
| 15 years | 4000 | 33.2 Lakhs |
| 18 years | 4000 | 56.9 Lakhs |
| 20 years | 4000 | 80.9 Lakhs |
| 22 years | 4000 | 1.1 Crores |
| 25 years | 4000 | 1.9 Crores |
| 28 years | 4000 | 3.2 Crores |
| 30 years | 4000 | 4.5 Crores |
These numbers demonstrate the effectiveness of compounding and the significance of maintaining an investment over extended time periods in order to maximise returns.
Wealth Accumulation through SIP
Think about this instance: With an estimated 17% yearly return, investing Rs. 14,40,000 (₹14.4 Lakhs) over 30 years in a SIP may increase your wealth to an astounding Rs. 4,50,30,656 (Rs. 4.5 Crores). Over the course of the investing period, this translates into a wealth gain of Rs. 4,35,90,656 (Rs. 4.4 Crores).
Comparing SIP with Popular Investment Options
Based on interest rates, let’s contrast SIPs with other popular investment options in India:
| Investment Option | Interest Rate (%) |
|---|---|
| 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.)
