Mutual funds are becoming very popular among investors today. Many investors choose SIP to invest in them. Through SIP, you can build a big fund for the future by investing small amounts regularly. In this article, we will see how long it will take to create a fund of Rs 10 lakh with SIPs of Rs 1,000, Rs 2,000, and Rs 5,000. Let us understand this with the help of simple calculations.

Rs 1,000

If you invest Rs 1,000 every month in mutual funds through SIP, at a return of 12%, it will take 20 to 21 years to create a fund of Rs 10 lakh.

Rs 2,000

If you invest Rs 2,000 every month, at a return of 12%, you can create a fund of Rs 10 lakh in 15 years.

Rs 5,000

If you invest Rs 5,000 every month, at a return of 12%, a fund of Rs 10 lakh can be created in 9 to 10 years.

Shaily Gang, Head of Product at Tata Asset Management, says it does not matter when you start investing. What matters is how long you invest.

Due to compound interest, the longer you stay in the market, the more your returns grow. Many investors wait for the market to fall before investing, but this is not right.

An investor who starts SIP early at current market levels can get higher returns than someone who waits for the market to fall because waiting reduces the time spent in the market, which can lower XIRR returns.

Investors can also earn more by using a step-up SIP, where the investment amount increases gradually over time, giving better returns than a normal SIP.