SIP Tips: By investing ₹500 every month through SIP, you will get ₹40,552 in 5 years, know how...

Mutual Fund Investment Tips: The common perception about the world of investment is that only a person with a lot of money can survive here. But according to experts, this is not the case at all. You can get big returns with small investments. If you do a job and while fulfilling your household responsibilities, you are left with only Rs 500 in your pocket, then you can invest with this amount too. Yes, this is possible. You can start with a Systematic Investment Plan, which you know as SIP. You can make good money in 5 to 10 years by investing only Rs 500 every month.

However, investment experts believe that if you want to invest in mutual funds or SIP, then you should always think about long-term investment, only then do you get maximum returns. Although Rs 500 every month may seem like a small amount to invest, such small investments also benefit from the power of compounding. The final money in 5 years may not be very big, but it can definitely fulfill small financial goals.

If you invest Rs 500 every month
If you invest Rs 500 every month for 5 years, then every year you will get interest at the rate of 12% on it. In 5 years, you will invest a total of Rs 30,000, on which you will get an estimated return of Rs 10,552. That is, after 5 years, you will get Rs 40,552. You will not have to pay any tax on this.

What if you continue this investment for 10 years?

If an investor decides to continue this contribution for 10 years, then their maturity amount will also be tax-free. In 10 years, you will invest ₹ 60,000. You will get interest at the rate of 12% per annum. That is, the estimated return will be ₹ 52,018. After 10 years, the final amount will be ₹ 1.12 lakh.

Useful information
To increase the total amount, financial experts recommend that the SIP amount be increased by 10% every year. For example, after investing ₹ 500 per month in the first year, you can increase it to ₹ 550 in the second year and continue this habit further. Such a gradual increase helps the total amount grow through compounding.

Finally, SIP investing helps in accumulating wealth even with small monthly investments. However, consistency is very important. It is advisable to evaluate multiple mutual fund schemes, such as equity, debt, or hybrid, so that you can choose the most suitable scheme as per your financial goals.

Disclaimer: This content has been sourced and edited from News 18 hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.