current time Crores of people in the country are investing money in mutual funds through SIP. However, very few of them are using step-up SIP. It is possible that you may also be investing money in mutual funds through SIP but may not be doing step-up SIP. Let me tell you that if you are considering the returns of SIP a lot then you will definitely be surprised to know the income from Step-up SIP. Let us tell you what Step-up SIP is and how it is going to earn more than SIP.
What is step-up SIP?
Let us tell you that Step-up SIP is exactly like a normal SIP. Yes, the basic difference is that in step-up SIP you decide to increase a fixed amount every year. If you currently have a SIP of Rs 20,000 and increase it by 10 percent next year. By doing this, a larger fund would be invested and you would get more money than expected.
Simple SIP: If you do SIP of Rs 10,000 per month and you get returns at the rate of 12 percent. If you invest in SIP for 10 years, how much amount will you get? Let us know.
- investment funds: Rs 12,00,000
- Estimated Returns: Rs 11,23,391
- Total amount received: Rs 23,23,391
Step-up SIP: Now you increase your annual investment by up to 10 percent through step-up SIP. So let’s see how much return you will get after 10 years on an investment of Rs 10,000 per month.
- investment funds: Rs 19,12,491
- Estimated Returns: Rs 14,61,835
- Total amount received: Rs 33,74,326
You can estimate yourself that after 10 years you will get about Rs 10 lakh more.
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