A Systematic Investment Plan (SIP) is a simple way to regularly invest a fixed amount of money in mutual funds, promoting disciplined investing. SIP is gaining popularity among young and old, both kind of investors, with each passing day. SIPs are gaining major popularity as a growing number of young investors choose this investment option.
A Systematic Investment Plan provides a flexible way to invest regularly in Mutual Funds, allowing you to:
- Invest a fixed sum at regular intervals (weekly, monthly, or quarterly).
- Change investment amount anytime based on your financial situation.
- Your investment amount will be auto-debit from the individual’s bank account.
- An Individual will get corresponding units of your chosen mutual fund.
In the year 2025, young investors may seek new investment opportunities. This article guides young investors in finding the best Systematic Investment Plan strategy adjusted to their needs. Let’s explore how investing just Rs 500 monthly for 40 years can help an individual build a massive corpus of over Rs 50 lakhs.
SIP Of Rs 500 For 40 Years
Assuming a 12% annual return rate, we’ll analyze a Systematic Investment Plan that can generate impressive returns.
Rs 500 Per Month For 40 Years
- Monthly Investment: Rs 500.
- Time Period: 40 years or 480 months.
- Expected Annual Return Rate: 12%.
- Total Invested Amount: Rs 2.40 lakh.
- Estimated Return: Rs 57,01,210.
- Total Amount At Maturity: Rs 59,41,210.
(This is the data based on SIP calculator)
How Does This Calculator Works?
The calculation for a SIP plan is based on the formula given bellow:
M = P × ({[1 + i]^n – 1} / i) × (1 + i).
- M = Amount you receive upon maturity.
- P = Amount you invest at regular intervals.
- N = Number of payments you have made.
- I = Periodic rate of interest.
(Disclaimer: This article is for informational purposes only and should not be construed as an investment advice. Prior to making an investment or taking a loan, conduct thorough research and consult with your financial advisor.)
ALSO READ: SIP: Want To Build Rs 10 Crore Corpus? Rs 10,000 A Month Can Make It Happen – Here’s How
