You can invest in mutual funds through both SIP and lump-sum methods. But most people choose the option of SIP. Through SIP, you can create a huge fund by investing money in installments.

Today we will know that if a person does a SIP of Rs 5000 every month, then how much fund they will get after 27 years. Let's understand this with the help of a calculation.

Calculation
If a person invests Rs 5000 every month and he is doing this for 27 years, then he will get Rs 1,08,11,565 crore on maturity at the rate of 12 percent return. In these 27 years, he will get only Rs 16,20,000 as return.

Let's know what are the benefits of SIP.

Benefits of SIP
Investing in SIP also gives the benefit of compounding. Therefore, if you are investing money for a long time, then you get maximum benefit from SIP.

You can invest as much as you want in SIP. There is no limit to investing in it. However, keep in mind that there should be diversification in the portfolio. Which means that investments should be made in different asset classes.

How does the SIP calculator work?

Through the SIP calculator, investors can easily find out how much return they will get on their investment in the future. Most people invest in a mutual fund SIP for 20 to 30 years. So that they can get a good amount of funds in the future.

At present, investors in mutual funds get an estimated return of 12 to 14 percent. However, this return depends on the fluctuations of the stock market.

The SIP calculator tells you about the maturity fund you will get in the future. However, the Expense Ratio is not added to it. This expense ratio is the same as the one you have to pay while investing.

Using the SIP calculator, you can calculate the maturity amount based on the estimated annual returns.

Apart from this, it also tells you how much money you should invest every month to create the desired fund.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.