The stock market is currently experiencing volatility, causing concern among mutual fund investors. However, it's not wise to stop SIPs due to fear of market declines. Patience and consistent investment are essential for long-term investing. Specifically, by starting a SIP of just ₹10,000 per month and increasing your investment by a fixed amount each year, you can set a target of building a corpus of ₹1 crore. Understanding the step-up SIP and compounding formula is crucial.

Don't stop your SIP during market fluctuations.
The stock market fluctuates frequently. Global events, war-like situations, and economic uncertainty impact the market. In such circumstances, many investors panic and stop their SIPs. However, those considering long-term investments should avoid making hasty decisions. Depending on your financial situation, continuing to invest can be beneficial.

What is a Step-Up SIP?
Step-Up SIP means increasing your monthly investment by a fixed percentage each year. For example, if you initially start a SIP of Rs 10,000 per month and increase it by 10% each year, your investment grows over time. This is an option to increase your investment as your income increases.

Calculating a Rs 1 crore SIP from a Rs 10,000 SIP:
Suppose you start a Rs 10,000 SIP every month and increase it by 10% every year. Assuming an annual return of 20%, you can accumulate a corpus of over Rs 1 crore in 13 to 14 years.

First Year – Investment of Rs 10,000 every month.

Fifth Year – Monthly SIP of approximately Rs 14,641.

Tenth Year – Monthly SIP of approximately Rs 23,579.

Fourteenth year – Monthly SIP of approximately Rs 34,000.

Returns on this investment and the final fund may vary depending on the timing of the investment and market performance.

There is no guarantee of getting a 20% return!

It's important to note that the above calculations are based on a hypothetical assumption of a 20% annual return. Mutual fund investments are subject to market risk. There's no guarantee that you'll achieve a 20% return. Actual returns may be higher or lower.

PC: INDIA TV HINDI