New Delhi: Mutual funds have become one of the popular investment instruments in current times among Indian investors. The ease with which one can invest on a monthly basis by creating a systematic investment plan (SIP) makes mutual funds favourable among investors.
By investing on a regular basis, mutual funds offer almost similar returns to equity. You, however, will have to continue your long-term investment innings in SIPs to make sure that you have a decent corpus when you plan to exit.
For instance, by investing Rs 50 per day, you can easily build a corpus of Rs 50 lakhs in a period of 30 years. According to the SIP calculator, if you invest about Rs 1,500 per month for 30 years, you will get Rs 52.9 lakh.
Of the total Rs 52.9 lakh, your invested sum would be just Rs 5.4 Lakhs while the gain would be a whopping Rs 47.5 Lakhs. This happens because of the power of compounding — which makes mutual fund investments much more attractive.
So, for example, if you start saving Rs 1500 monthly at the age of 20 years, you will get Rs 52.4 lakh minus capital gains taxes when you turn 50 years old. You can choose any investment scheme that offers an interest rate of 12% or more to make sure that your money grows with a compound.
You can use any online or offline platform to start your mutual fund investment journey. You can start investing in mutual funds with a minimum amount of Rs 100. You can invest as much as you want in mutual funds.
However, investors should remain wary of the fact that mutual fund investments are linked with markets and therefore investors face the risk of losing money as well. Also Read: Indian Railways not for sale, won’t be privatised, says Ashwini Vaishnaw
That is the reason why it’s often advised to take advice from your financial advisor first before making any investments. Also, you may need to understand other risks involved with mutual fund investment before putting a single penny in the asset. Also Read: Meta to expand Facebook Protect program to India for journalists, government officials