Mutual funds SIP calculator: How to accumulate ₹50 lakh in 10 years
Premium- Mutual fund calculator: To begin with least possible monthly investment, one should increase one's investment with increase in one's income, say tax and investment experts
Mutual funds SIP calculator: Systematic Investment Plan (SIP) is an attractive investment option offered by Mutual Funds that allows an investor to invest a fixed amount in a Mutual Fund scheme at regular intervals. In this investment route an investor can invest once in a month or once in a quarter instead of investing a lump sum amount at one time. It enables an investor to grow whopping amount for mid-term investment goals like higher studies of child, dream vacation, sabbatical etc. So, even if an earning individual lacks a lump sum amount for one time investment, he or she can accumulate wealth to meet one's mid-term investment goals where a person would require around ₹50 lakh to meet such goals.
Now, the question is how to accumulate ₹50 lakh in mid-term or say in 10 years? According to tax and investment experts, one should increase one's investment with increase in one's income. So, annual step-up in mutual funds SIP is a good option to start an investment with least possible monthly investment.
Speaking on whether ₹50 lakh investment target in 10 years is achievable or not; SEBI registered tax and investment expert Jitendra Solanki said, " ₹50 lakh investment goal in 10 years is little ambitious and for that the investor would require investment discipline like continuing one's monthly SIP without fail in any circumstances. Apart from this, the investor should increase one's monthly SIP using annual step-up. This will enable an investor to start with least possible monthly SIP amount.
On how much annual step-up will be enough to meet this ₹50 lakh target in 10 years of investment; Kartik Jhaveri, Director — Wealth at Transcend Capital said, "Common practice is 10 per cent annual step-up in one's monthly SIP. However, to met such ₹50 lakh ambitious target in 10 years, one should keep annual SIP step-up at 15 per cent."
On how much return one can expect after investing in mutual funds SIP for 10 years, both the experts said that one can expect around 12 per cent return after investing for 10 years.
Mutual fund calculator
Assuming 15 per cent annual step-up and 12 per cent return, if a person wants to accumulate ₹50 lakh in 10 years, then mutual fund return calculator or mutual fund SIP calculator suggests that one will have to start a mutual funds SIP with ₹12,500 per month investment.
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However, in case a person can't invest ₹12,500 per month, in that case he or she has an option to keep the annual step-up slightly higher at 20 per cent. In that case, starting a mutual funds SIP with ₹10,500 monthly investment would enable the investor to meet its ₹50 lakh investment goal in 10 years.
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On mutual fund SIP plans that can give 12 per cent return in 10 years; Vinit Khandare, CEO & Founder at MyFundBazaar India Private Limited listed out the following SIP plans:
Small-cap Fund: SBI Small Cap Fund - Regular Growth.
Mid-cap Fund: Aditya Birla Sun Life Mid Fund - Plan - Growth Regular Plan.
Large-cap Fund: HDFC Top 100 Fund - Regular Plan - Growth.
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