Curated By: Business Desk
Last Updated: August 28, 2023, 11:57 IST
Parents try to provide the best facilities to their children.
SIP is one of the safest investment options, as it helps build a large corpus of funds through small investments regularly.
Systematic Investment Plan (SIP) is a convenient method of investment. Investors chose SIP as one of the safest investment options, as it helps build a large corpus of funds through small investments regularly. It is an investment tool offered to investors, allowing them to invest a small amount regularly in an automatic manner.
Currently, education expenses have increased. Parents always try to provide the best educational facilities for their children. If you want to secure your child’s future, you may opt for the SIP investment fund. Since the goal is long-term, you need to start saving at an early stage. As per experts, if you start investing Rs 5000 every month, after 20 years, you will have a fund of almost Rs 50 lakh.
SIPs usually have an interest return of 12%; and as these investment plans are long-term, you will also receive compound interest. If you start investing Rs 5000 as soon as your child is born and continue to invest for almost 20 years, you will have a total investment of approximately Rs 12 lakh. In this case, you will get a total interest rate of around Rs 37,95,740.
On completion of the scheme, after investing for 20 years, you will receive a total fund of around Rs 94,88,175. This is based on an average calculation of the interest received in an SIP investment plan. Certain mutual fund companies offer higher interest rates on long-term plans. If you invest Rs 18,000 monthly, you will receive a corpus of around Rs 70 lakh within 13 years. If the amount invested is small, then try to keep increasing the investment amount by 10% every year.
As per experts, the domestic education cost is around Rs 20 lakh; but for higher education abroad, it is approximately Rs 50 lakh (depending on the discipline). The investment requirement will go up based on other factors.
SIPs and other mutual funds help you stay committed to your financial goals, but they also include market risk, and it is always suggested to consult experts if needed.
