SIP are the best way to allow investors to invest ₹1,000 per month and yield better returns. Unlike applying one lump sum, you contribute a small amount often, thus taking advantage of the given time. Your money gains interest through the power of compounding.
What is SIP?
SIP stands for Systematic Investment Plan, which is a very easy method of investing in mutual funds through having to invest a constant amount of money in regular intervals. The correct system makes you invest steadily and increase your wealth exponentially in the long run.
Q: If I invest ₹1000 per month in SIP for 20 years , then how much will I return after 20 years?
Here below is the return:
1. Large Cap Mutual Fund
Monthly investing of ₹1,000 for 20 years will give approximately 10% to 11% returns. Approx. 8 to 9 lakhs.
2. Mid Cap Mutual Fund
SIP with ₹1,000 for two decades with an average return rate of 15-16% catapults portfolio size of ₹15-16 lakhs.
3. Small Cap Mutual Fund
Boom equity funds bear higher risks than large caps but they can yield impressively high returns. At an interest rate of 20%, the generated interest of an investment of ₹1,000 every month increases the corpus to ₹30-31 lakhs after two decades.
4. Flexi Cap Mutual Fund
These funds invested in big capital, mid-capital, and small capital stocks. At 13-14 percent return, a ₹1,000 every month fixed investment could yield ₹13-14 lakhs within twenty years.
How to Invest in SIP?
| Step | Description |
|---|---|
| Select a Plan | Choose a SIP plan based on your spending capacity, investment goals, and risk-taking abilities. |
| Set Investment Amount & Frequency | Use a SIP calculator to determine the appropriate investment amount and the frequency of contributions. |
| Complete KYC | Enter your bank details and set up automatic debits to complete the KYC process. |
| Choose Fund Type | Decide whether to invest in a mutual fund or a ULIP based on your financial goals. |
| Fund Management | A professional fund manager allocates the investments in assets like shares or bonds on your behalf. |
| Monthly Deduction | The SIP amount is deducted monthly to buy mutual fund units at the prevailing NAV (net asset value). |
| Flexible Contributions | Adjust or pause your SIP at any time based on your needs. |
| Track Returns | Use a SIP calculator to monitor potential long-term returns and assess performance. |
Best SIP with respect to investment for 20 years
Investing in a systematic investment plan (SIP) for 20 years can let you construct wealth gradually through predetermined investments and market gains.
Here are some of the best SIP plans often recommended for long-term investments:
| Fund Name | Description |
|---|---|
| Mirae Asset Large Cap Fund | Operates in large-cap, offering functional returns with relatively low volatility. Suitable for long-term investment with moderate risk. |
| HDFC Mid-Cap Opportunities Fund | Focuses on mid-cap companies with high growth potential, generating high risk-adjusted returns over a 20-year horizon. |
| Kotak Emerging Equity Fund | Designed for young companies, the possibility of obtaining a rather high yield makes this fund attractive. In choosing such an investment, the investor has a higher risk tolerance; the aim is to build long-term wealth. |
| ICICI Prudential Balanced Advantage Fund | This fund has both equity and debt products and those who wish to invest in a moderate risk and high return shall invest in this fund. |
| SBI Small Cap Fund | Specializing primarily in securities of small-capitalization companies, this fund carries a high growth profile compared to the overall market risks. |
Conclusion
Hence the returns based on the type of fund may be large cap, mid cap, small cap, and flexi cap, which typically earn returns in the range of ₹ 8 to 9 lakhs to ₹ 30 to 31 lakhs.
Investing that money in the right fund depending on goals and risk tolerance as well as market trends is therefore very vital for higher returns. Being professionally managed, flexible on contributions, and automatic on deductions, SIPs present a simple and secure road map towards prosperity.
