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Rs 20,000 SIP vs Rs 15,000 Step Up SIP: Which investment can give higher returns over 30 years?
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
SIP vs Step-Up SIP: Whether you're planning to buy a car, saving for your retirement, your child's education, their wedding, or whatever your goals may be, it is important for you to save and invest money regularly. Proper financial planning helps you accumulate wealth for the future without compromising your daily needs. For this, there are many investment options available in the market, and one of them is mutual fund SIPs. It is a regular and disciplined investing option that aims to build a substantial corpus in the long term. There are two main types of SIPs: Regular SIP and Step-Up SIP.
SIP: It is a market-linked investment option in which investors can invest monthly, quarterly, or annually based on their convenience and capacity.
Step-Up SIP: This is a type of SIP plan that gradually increases your monthly investment at regular intervals (for example, by 5 per cent or 10 per cent each year).
Now, let's compare both the investment options by investing Rs 20,000 in SIP and Rs 15,000 in Step-up SIP per year for 30 years separately to see which option will give higher returns.
(Disclaimer: This is not investment advice. The calculations presented are projections. Please do your own due diligence or consult a financial advisor for personalised advice.)
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1/11
What is the minimum amount to invest in an SIP?
1/11One can start investing in SIP with as low as Rs 500 per month.
2/11
What is the maximum amount to invest in SIP?
2/11There is no maximum limit for investing.
3/11
Interest rate offered by the SIP
3/11Since SIPs are market-linked investments, returns are not fixed and can fluctuate. But we are assuming a 12 per cent annual return rate for these calculations.
4/11
Which investment gives better returns: SIP or Step-up SIP?
4/11But which investment option can create a higher corpus in 30 years? Let’s compare them to find -
5/11
Regular SIP: What is the total amount you will invest in 30 years?
5/11According to the calculation, if you invest Rs 20,000 per month in SIP mutual funds for 30 years, then you will invest a total amount of Rs 72,00,000.
6/11
Regular SIP: How much can the capital gains be?
6/11The estimated capital gain could be Rs 5,44,19,464.
7/11
Regular SIP: How much money may you accumulate in 30 years with a monthly SIP of Rs 20,000?
7/11With a 12 per cent annual return rate, if you invest Rs 20,000 per month in a regular SIP, the total amount received can be Rs 6,16,19,464.
8/11
Step-up SIP Calculations
8/11Now, let’s look at the Step-Up SIP and calculate how much money you can accumulate with an initial investment of Rs 15,000 per month, increasing by 5 per cent annually over 30 years.
9/11
Step-up SIP: What is the total amount you will invest in 30 years?
9/11According to the calculation, if you invest Rs 15,000 per month in SIP mutual funds for 30 years, increasing the amount by 5 per cent each year, then you will invest a total amount of Rs 1,19,58,993.
10/11
Step-up SIP: How much can the capital gains be?
10/11The estimated capital gain could be Rs 5,81,78,268.
11/11
Step-up SIP: How much money may you accumulate in 30 years with a monthly SIP of Rs 15,000?
11/11With a 12 per cent annual return rate, if you invest Rs 15,000 per month in a regular SIP, the total amount received can be Rs 7,01,37,260.
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