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Your SIP will give double the return than you thought, just have to apply this Jugaad and your account will be filled with money

If you want to add a big fund through SIP, then you just have to fit a Jugaad in it. After this, you can earn so much profit from SIP, which you would not have even imagined. Know here what you have to do.

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SIP

SIP Vs Top-up SIP: Despite being a market-linked scheme, people like SIP a lot. The big reason for this is the long-term returns in SIP and its features. Money is invested in mutual funds through SIP. In terms of investment, financial advisors say that if you want to deposit a big amount of money in the long term, then invest in a place where you get a return that beats inflation. SIP is one of those options.

Because of being market-linked, you do not get guaranteed returns in this scheme, but experts believe that its average return in the long term is 12 percent. Due to the benefit of compounding, there is every possibility of a large corpus being created from a long-term SIP. But if you put an annual top-up in this SIP, then you can get double the return than what you have thought and fill your account with money. Know how here.

Understand the calculation on a SIP of ₹5000

Suppose you start a regular SIP of ₹5000 and run it for 20 years, then you will invest a total of ₹12,00,000 in it in 20 years. In such a situation, if you calculate according to 12 percent return, then you will get ₹37,95,740 as interest. In this way, you will get a total of ₹49,95,740 in 20 years.

Top-up will double your profit

If you start a SIP of ₹5000 and apply a top-up of 10 percent on it every year, then you can accumulate a fund of about 1 crore in 20 years. Top-Up SIP is a facility through which you can add some amount to your regular SIP. For example, suppose you start a monthly SIP of ₹5,000, then after one year, increase it by 10 percent of ₹5,000, i.e., ₹500. Now your SIP will become ₹5,500. Next year, you have to increase it by 10 percent of ₹5,500, i.e., ₹550. In this case, your SIP will become ₹6,050. Similarly, you have to add 10 percent of the current SIP amount to it every year.

If you start a SIP with Rs 5000 and then apply a top-up of 10 percent annually, then in 20 years you will invest a total of Rs 34,36,500. But the interest on this will be Rs 65,07,858. In such a situation, in 20 years you will have Rs 99,44,358 i.e. about 1 crore rupees. That is, you can make double the money by applying an annual top-up of 10 percent than what you were thinking of making from a regular SIP of Rs 5,000.

(Disclaimer: Investments in mutual funds are subject to market risks. Before investing, do your own research or consult your advisor.)