Whether you are a beginner or an expert when it comes to personal finance, financial resolutions should be proactively addressed as we say goodbye to 2022 and welcome a new year in 2023. Making SIP investments is generally suggested for building your wealth since it enables you to optimise your returns by altering your SIP in any market circ*mstance. Given the benefit of compounding and the advantage of rupee cost averaging, investing through SIPs for long-term goals is a good way to grow your wealth. We have taken an example here, considering if you have a moderately-aggressive risk profile who plans to accumulate ₹50 Lakhs in the next 5 years. So how much SIP is required per month and which mutual funds can be suitable to your risk profile?
Based on an interview with CA Manish P Hingar, Founder at Fintoo, your question is addressed here. The spokesperson said it is always the right idea to do goal-based investments rather than just investing your money without any goal in mind. This approach involves identifying the amount of money needed to reach a particular goal, determining the amount of time available to reach the goal, and considering the investor's risk tolerance and other factors that may affect the success of the investment plan.
Now for the individual with a moderately-aggressive risk profile who plans to accumulate ₹50 Lakhs in the next 5 years, it is suggested to invest in categories such as Flexi cap funds or Multicap funds which invest in a diversified mix of stocks across any market segment and sectors. For example, if an individual plan to accumulate ₹50 lakhs over the tenure of 5 years, assuming the individual invests in a Flexicap fund or a Multicap fund which is giving an annualized return of 15%, then the individual needs to invest ₹55,750 per month for 5 years in order to generate the required corpus.
Having said that, mutual fund schemes such as HDFC Flexi cap Fund and Nippon India Multicap Fund have given a stellar return of 19.40% and 15.90% respectively in the current year as compared to their category average of 2.59% and 5.91% respectively in the same period. These two funds have been consistent performers over the years because of their diversified asset allocation and investment strategies that have helped them to be resilient to market downturns.
It's also a good idea to carefully research and compare different mutual funds before making a decision to ensure that you choose a fund that aligns with your investment goals and risk tolerance.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
FAQs
For example, if an individual plan to accumulate ₹50 lakhs over the tenure of 5 years, assuming the individual invests in a Flexicap fund or a Multicap fund which is giving an annualized return of 15%, then the individual needs to invest ₹55,750 per month for 5 years in order to generate the required corpus.
Which SIP is best for 3 years? ›
Following is the list of SIPs that you can invest in for 3 years in India based on their returns and performances:
- Baroda Pioneer Multi Cap Fund: It is also known as the Baroda Pioneer Growth fund. ...
- Canara Robeco Emerging Equities: It aims to generate capital by investing in diversified mid-cap stocks.
Step-up SIP: You can achieve your target of earning Rs. 1 crore in 5 years by starting with an SIP of Rs. 75,000 per month and increasing it by 10% annually. This option is good for those expecting their income to rise over time, allowing them to progressively invest more.
What happens if I invest 20 000 a month in SIP for 5 years? ›
Value of INR 20,000 per Month in SIP
If an investor invests INR 20,000 per month for a period of 5 years, he will be able to earn INR 17 lakh as the overall income generated from SIP. The total investment in the tenure of 5 years will be only INR 12 lakh.
Which SIP gives highest return in 5 years? ›
Best SIP to Invest for 5 Years
| Name | NAV | 5 Yr Returns |
|---|
| Quant Flexi Cap Fund Direct - Growth | ₹ 119.07 | 37.40% |
| Tata Small Cap Fund Direct - Growth | ₹ 47.60 | 36.41% |
| Edelweiss Small Cap Fund Direct - Growth | ₹ 49.18 | 36.38% |
| Motilal Oswal Midcap Fund Direct - Growth | ₹ 118.70 | 35.82% |
31 more rowsThe 15-15-15 rule suggests investing 15% of your income for 15 years in a mutual fund with 15% annual returns. Compounding is the process of reinvesting earnings to generate more returns. By following this rule, you can achieve long-term financial goals such as accumulating a substantial corpus for future needs.
Which SIP gives 40% return in India? ›
Two from JM Mutual Fund
Two schemes from JM Mutual Fund — JM Value Fund and JM Flexicap Fund — gave an XIRR of 40.80% and 40.58%, respectively, in the last three years. A monthly SIP of Rs 10,000 in these two schemes would have been Rs 6.31 lakh and Rs 6.29 lakh, respectively.
Is SIP better than fd? ›
SIPs can be used for investing in all mutual funds, but they are typically more popular for investing in equity funds. On the other hand, FDs require you to invest a lump sum at once, earning a fixed interest rate until the deposit matures. FDs are widely considered safer, offering guaranteed returns.
Which mutual fund doubles in 3 years? ›
Top large and mid cap SIP mutual funds: No. 1 fund has nearly doubled investment value in 3 years
- Quant Large and Mid Cap Fund - Direct Plan. ...
- Bandhan Core Equity Fund - Direct Plan. ...
- Motilal Oswal Large and Midcap Fund - Direct Plan. ...
- HDFC Large and Mid Cap Fund - Direct Plan. ...
- Kotak Equity Opportunities Fund - Direct Plan.
A monthly SIP of Rs. 5000 for 3 years would have become Rs. 2.38 Lakhs from the total of Rs. 1.8 Lakhs invested over the time period.
Based on this data you will have approx 08–09 lakhs. Here your money will be safe or have zero risk. Mid Cap Mutual Fund:- If you invest Rs 1000/per month for 20 yrs in Mid cap mutual fund, Assuming that 15–16 % interest rate. You will have approx 15–16 lakhs.In long term all mutual funds are safe.
What if I invest 10 000 a month in SIP for 10 years? ›
It has given 25.96 % annualised returns in ten years. The calculator shows that a monthly SIP of ₹10,000 in this fund could have grown to approx. ₹57,53,702 in ten years. The mutual fund calculator shows how a lumpsum investment of 1 lakh grew more than five times in ten years.
What if I SIP $30,000 per month for 5 years? ›
Example of Using an SIP Calculator
You aim to have ₹20 lakhs in 5 years and can invest ₹30,000 every month. With an expected annual return of 10%, you plug these numbers into the mutual fund SIP calculator. This means your investment has grown significantly, reaching a maturity value of ₹24.3 lakhs.
How much will I have if I invest $100 a month for 5 years? ›
You plan to invest $100 per month for five years and expect a 6% return. In this case, you would contribute $6,000 over your investment timeline. At the end of the term, your portfolio would be worth $6,949. With that, your portfolio would earn around $950 in returns during your five years of contributions.
Which SIP is best for $20,000 per month? ›
A monthly SIP of Rs 20,000 in Quant Small Cap Fund would have grown to Rs 1.04 crore in the last 10 years. The scheme gave an XIRR of 27.73% in the same period. Quant ELSS Tax Saver Fund would have turned a monthly SIP of Rs 20,000 into Rs 95.38 lakh with an XIRR of 26.04% in the last 10 years.
How much is $5000 for 5 years in SIP? ›
How much is Rs. 5,000 for 5 years in SIP? If you invest Rs. 5,000 per month through SIP for 5 years, assuming 12% return. The estimate total returns will be Rs. 1,12,432 and the estimate future value of your investment will be Rs. 4,12,431.
How much return can I expect from SIP in 5 years? ›
What is an SIP Calculator?
| Returns |
|---|
| Fund Name | 3 Years | 5 Years |
|---|
| Large and Midcap Fund MIRAE ASSET | 19.74% | 24.32% |
| Flexi Cap Fund PGIM INDIA | 14.75% | 23.39% |
| Flexi Cap Fund DSP | 18.41% | 22.33% |
6 more rowsStarting a SIP of Rs. 30,000 per month for 5 years is a prudent decision towards achieving your financial goals. By investing in diversified equity funds or balanced funds through a Certified Financial Planner, you can navigate market uncertainties and work towards building a robust investment portfolio.
How much to invest to get 50 lakhs in 10 years? ›
At this rate, a Rs 10000 monthly SIP started with this fund would have earned over Rs 50 lakh to investors in 10 years. The fund has performed even better in the shorter time-frames like 5 years, 3 years and 1 year. Over the last 5 years, it has grown by 40.55% annually and 167% in absolute terms.
