Micro SIP enables investors to invest in mutual funds with a minimum of Rs 50 or Rs 100 every month. These mutual fund SIP schemes could be helpful for small investors like daily wage earners, students and gig workers to accumulate wealth in the long run.
What Is A Micro SIP?
A micro SIP is a variation of the traditional Systematic Investment Plan. It's designed to make mutual fund investments even more convenient. While regular SIPs have a minimum monthly investment requirement of Rs 500, micro SIPs reduce it to Rs 100. They enable investors to save small amounts every now and then, either daily or monthly. For example, Rs 10 per day SIP amounts to Rs 300 monthly, while Rs 50 per day amounts to Rs 1,500. These small payments are ideal for those who wish to cultivate a habit of disciplined investment without stretching their budget.
Let's now find out how a Micro SIP, like investing Rs 10, Rs 20, or Rs 50 per day, would increase in five years.
Scenario 1: Rs 10 Per Day
Suppose you invest Rs 10 per day, which amounts to Rs 300 per month, into an SIP for five years with an annual return of 12% per annum. At the end of five years, your investments may grow into Rs 25,008.87, with a total return of Rs 6,758.87. Your total investments in five years will amount to Rs 18,250.
Scenario 2: Rs 20 Per Day
If you invest Rs 20 per day, or Rs 600 per month, in an SIP for five years at 12% return per annum, your total corpus may grow to Rs 50,017.74. Your estimated returns would be approximately Rs 13,517.74, over a total investment of Rs 36,500.
Scenario 3: Rs 50 Per Day
Now let's consider an investment of Rs 50 per day, or Rs 1,500 per month, through a SIP for five years with a 12% return every year. Your overall investment will stand at Rs 91,250. The total corpus is expected to rise to Rs 1,25,044.34, with an estimated return of Rs 33,794.34.
In short, a micro SIP won't turn you into a millionaire overnight, but it could be a suitable beginning. Even Rs 10 a day can help to accumulate a sizable corpus over the years. Most importantly, it helps develop the habit of investing early.
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