Mutual Funds

A Rs 25,000 monthly SIP can grow into a larger long-term corpus when contributions rise annually, with a 10% step-up helping investors put more money to work.

Assuming an annualised return of 12% for a mutual fund SIP, the Rs 10,000 monthly investment over five years would grow to around Rs 8.17 lakh.

If you already have a strong SIP portfolio, direct stock investments may be beneficial. 

An SIP calculator can offer a useful snapshot of how regular investing and the power of compounding may build wealth over the years.

With a hypothetical 12% annual return, Rs 10 lakh invested at 30 could grow to about Rs 3 crore by 60, compared with Rs 96.46 lakh at 40.

A Rs 1 crore corpus left invested at 12% annualised returns could grow to around Rs 3.11 crore in 10 years, without any further SIP contributions.

SIP contribution for August stood at a record high of Rs 32,297 crore, a rise from Rs 31,961 crore in July.

Going from Rs 5 lakh to Rs 1 crore depends on disciplined saving, regular investments and compounding, with investment returns playing a bigger role as the corpus grows.

For a retirement-focused saver, allowing the money to stay invested for as long as possible can make a compelling case for retaining the corpus.

EPF offers stability and predictable returns, while SIPs provide greater growth potential with market-linked returns.

Leaving a large sum idle may mean missing out on potential returns, while investing the entire amount in the wrong asset at the wrong time can expose you to unnecessary risk.

The bigger distinction lies in the amount invested over time. By the end of 20 years, the SIP investor would have put in Rs 60 lakh, six times the Rs 10 lakh invested through the lump-sum approach.