What is SIP?
SIP works on the principle of regular investments. It is like your recurring deposit where you put in a small amount every month. It allows you to invest in a MF by making smaller periodic investments (monthly or quarterly) in place of a heavy one-time investment i.e. SIP allows you to pay 10 periodic investments of Rs 500 each in place of a one-time investment of Rs 5,000 in an MF.
Do you know what will be value of Rs. 1,000 per month @ 8% and 15%, if invested through SIP?
(FIgures in brackets is the amount invested) and next two figures are value of the invested amount at the end of the term if compounded @ 8%/15%.
After 5 yrs (60000)
73, 450/ 88,575
After 10 yrs (120000) 1,81,372/2,752,71