21 Aug , 2021 By : Kanchan Joshi
Mutual fund calculator: Systematic Investment Plan (SIP) is an investment option offered by mutual funds wherein an investor is allowed to contribute at regular intervals. These intervals can be monthly, quarterly and half-yearly as well. So, those investors who don't have huge lump sum amount for investing can choose mutual fund SIP route and create huge amount in long-term. According to tax and investment experts, an investor can expect at least 12 per cent return on one's investment for long-term. They advised investors to set their investment goal using mutual fund return calculator and then decide their SIP amount.
On how to accumulate Rs5 crore in 20 years through mutual fund SIP; SEBI registered tax and investment experts Jitendra Solanki said, "Accumulating Rs5 crore corpus in 20 years through SIP investment is an ambitious target. If an investor, who doesn't have a lump sum amount for investing, he or she should opt monthly SIP as it will enable them allocate investment amount by making some adaptation in their monthly budget. Apart from this, one will have to increase monthly SIP with increase in one's income as well. Using annual step-up method in SIP investment makes it easy for the mutual fund investors to meet their investment goal for long-term."
On how much annual step-up one should choose that would be easy to maintain for 20 years; Kartik Jhaveri, director — Wealth Management at Transcend Consultants said, "Ideally, an investor is advised to choose 10 per cent annual step-up in one's monthly SIP amount, but to meet an ambitious Rs5 crore investment goal in 20 years, it has to be at around 15 per cent. It will help mutual fund SIP investor to keep the monthly SIP at a level that won't have much impact on one's monthly budget." Jhaveri also advised investors to choose equity mutual fund as the investor needs to take some risk to meet this ambitious target of Rs5 crore maturity amount in 20 years.
According to the mutual fund calculator, if an investor invests in mutual fund SIP in monthly mode, assuming 12 per cent return maintaining 15 per cent annual step-up, the monthly SIP required to start the investment would be Rs17,500.
As per the mutual fund SIP calculator, Rs17500 monthly SIP at 12 per cent annual return and 15 per cent annual step-up would lead to Rs5,02,14,390 or Rs5.02 crore maturity amount in 20 years.
Therefore, if an investor wants to accumulate Rs5 crore through SIP in 20 years, it would have to start investment with Rs17,500 monthly SIP maintaining 15 per cent annual step-up in monthly SIP amount.
0 Comment