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SIP Investment: Saving and investing have become extremely important in today's changing economic environment. If you also belong to a middle class family and want to save some money from your income and invest wisely, then we have brought important information about Systematic Investment Plan (SIP) for you.
Especially those who want to secure their future through regular savings can start investing under SIP of mutual funds. Under this scheme, even a small amount of money can turn into a big profit. Through this article, we will tell you how you can become a millionaire by saving just ₹ 100 monthly.
Benefits of SIP Investment:
The biggest advantage of investing under SIP is compounding, due to which your investment amount increases with time. This is an option in which you have to invest small amounts every month under mutual funds, and hence it gives big profits in the long run.
This scheme can be compared to the Recurring Deposit (RD) scheme of the bank, but the returns of SIP are much higher than the fixed deposit schemes of the bank. If you invest regularly for a long time, this scheme provides you relatively higher returns.
How to become a millionaire by saving ₹100 monthly?
For example, if you invest a nominal amount of ₹100 every month in SIP, even this seemingly small amount turns into a huge sum due to compounding over time. Let's take a look at its calculations:
Returns on investment of ₹100 every month for 20 years:
- total investment amount: ₹24,000
- Assumed Annual Return: 12%
- total interest: ₹75,915
- total money: ₹99,914.79
If seen in this manner, by monthly savings of just ₹ 100, you can get returns of approximately ₹ 1 lakh in 20 years. This calculation is based on 12% annual returns, which is often achieved with long-term investments in mutual funds.
If you get more interest than this, the returns will be even higher. Now let us understand the long term investment calculations in more detail.
Returns on investment of ₹100 every month for 30 years:
- total investment amount: rs36,000
- Assumed Annual Return: 12%
- total interest: rs3,16,991
- total money: rs3,52,991
If you regularly invest an amount of ₹100 in SIP for 30 years, then after 30 years you will have a corpus of around ₹3.5 lakh. Due to compounding, even small savings turn into a huge amount in the long run.
What is SIP?
SIP (Systematic Investment Plan) is a mutual fund scheme, through which you can invest easily. This scheme lets you automatically invest under mutual funds from your bank account every month. SIP is a financial instrument that offers high profit potential in the long run, and is compared to bank schemes as an option that gives higher returns.