SIP Calculation: When will a fund of Rs 25 lakh be created from a SIP of Rs 4000, understand the multiplication and mathematics through calculation..

Mutual funds have become the favorite platform of investors today. The reason for this is also SIP. Because through SIP, you can invest money in mutual funds in small installments. Under mutual funds, you get help in creating a big fund from a small installment.

Today, we will understand through this article how much time it will take to create a fund of 25 lakhs from a SIP of Rs 4000.

Calculation
Investment amount- Rs 4000
Return- 12 percent
If a person invests Rs 4000 every month through SIP, then, according to a 12 percent return, it may take them 15 years to create a fund of 25 lakhs. In these 15 years, Rs 9 lakh will be invested by the investor.

At the same time, after 15 years, you will get Rs 25,23,000 on maturity. Along with this, this profit can be increased further by taking the step-up facility.

What is Step-up SIP?

Step-up SIP means that you increase your investment amount by a fixed amount at a fixed time. This time limit can be one year, one month, or any amount. At the same time, how much you want to increase it also depends on you.

What is the benefit of this?

Suppose an investor decides through the Step-up option that he will increase the investment amount by 10 percent every year. This means that if the investment amount is Rs 1 lakh in the first year, then in the second year, this investment amount will be Rs 1,10,000.

Through step-up, your investment amount keeps increasing over a fixed time. Therefore, if the investment amount is more, then the profit share will also be more.

Shaily Gang, Head Product, Tata Assets Management, said that suppose if an investor does a SIP of Rs 10,000 every month for 20 years. The second investor makes a SIP of Rs 10,000 per month for 20 years and also does a step-up of 10% every year. Even if the normal return is 10%, the investor who does the step-up will benefit more because the investment amount is higher.

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