Better returns can be obtained by investing in SIP. With this, a good amount can be added till retirement. In this, you can also increase the investment amount later.
Benefits of investing in SIP
It is very important to add a good fund to overcome the money problems that may occur after retirement. Therefore it is important to invest money in the right scheme. Since the Corona period, interest rates have been reduced in other savings schemes including FDs. In such a situation, investing in mutual funds through Systematic Investment Plan ie SIP can be a profitable deal to get better returns. It gives higher returns than other schemes. In this, there is more benefit than adding compounding interest.
Through SIP investment, you can accumulate funds worth crores of rupees over a long period of time in spite of low investment. With this, you will not have to face problems after retirement. With this you will be able to fulfill the needs of your children too.
When to invest
If you are 25 years old, then you can invest in SIP to raise retirement funds. To collect crores of funds, you have to take a long-term SIP of about 35 years. You can get around 12 to 16 percent interest on long-term SIP. In this, even after depositing a small amount, you can also increase the amount of your SIP by 10% every year, this will also give the benefit of compounding.
Make crores with stepup
If you are 25 years old and you invest Rs 500 per day i.e. Rs 15,000 per month, then you can accumulate a fund of Rs 20.83 crores with an annual return of 11 per cent with an annual step-up of 10 per cent. Under Step-up SIP, you can invest with a small amount in the beginning. After which you can increase some fixed amount in it every year. Step-up SIP gives an option to the investor to increase the SIP amount as the income increases.
Suppose you invest Rs 10,000 in SIP every month. You want to increase it by Rs 1000 every month. So you can use the top-up facility i.e. stepup at the end of every financial year or every half year.
Also read: There will be no money problem after retirement, these 4 options will give regular income every month
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