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How does an SIP work?

Power of compounding

One of the key factors that makes SIP in mutual funds a wise investment option is the "power of compounding". It is best summed as:

Early Investments = Multiplying Returns

Below is an illustration of how the power of compounding helps in long-term wealth creation by investing an amount of
` 3,000/month via SIP

(Assuming a 10% interest rate)

20 years
30 years
` 7.2 Lakhs
` 10.8 Lakhs
` 22.9 Lakhs
` 68.4 Lakhs
Time 30 years 20 years
Cost of Investment ` 10.8 Lakhs ` 7.2 Lakhs
Value of Investment ` 1.05 Crores ` 29.9 Lakhs

Calculate monthly SIP amount

Wondering how much you should start investing monthly to achieve your goal in time? Try out this tool and get your plan in place.

Select the tenure in which you would like to achieve your goal?
Select the sum you would like to target?
` 50,000

Select Expected Rate of Return

Tenure
Target
Expected Rate of Return
=
Monthly Investment Amount
` 811

How to start an SIP online?

1

Assess your risk profile

2

Set your desired instalment / SIP amount

3

Invest in a suitable scheme

Why start early?

Power of starting early

By investing early, it would be easy to achieve your goal.

Investor Rakesh and Nidhi invest ` 3,000/month until the age of 60 (assuming an interest rate of 10%)
Their corpus at 60 years of age
` 68Lakhs
Rakesh

Started investing at 30 years of age

` 40Lakhs
Nidhi

Started investing at 35 years of age

*Calculation done on the assumption that one investor begins investing at 30 years of age and the other begins investing at 35 years of age. Then at the age of 60, the early investor would have a corpus of over ` 68 lakhs vs. a corpus of over ` 40 lakhs. Calculation shows a difference of ` 28 lakhs at 60 years of age if one starts investing ` 3,000 earlier by 5 years.

Power of disciplined investing

When investing in SIPs, you do not have to worry about timing the market. Regular investing will ensure that you are invested irrespective of the market highs or lows. This will help you make the best of an opportunity that would have been difficult for you to predict in advance.

SIP in Equity Funds

Equity market offers a great opportunity for long term wealth creation. Mutual funds give you access to an experienced fund manager’s expertise in identifying growth opportunities and taking investment decisions. Wealth creation comes with systematic investment over a long term.

Investment Pro Tip

While saving for your future, start early!

This will allow your money to grow over the years and will allow you to gain from the power of compounding through market cycles.

Diversify to increase the stability of your plans

Diversify your investments. This will help increase stability even in a volatile market and ensure that your future plans are on track.

Mutual Fund investments are subject to market risk, read all scheme related document carefully. An investor education initiative

Corporate Office Address :

SBI Funds Management Pvt Ltd.

A Joint venture between SBI and AMUNDI

(CIN - U65990MH1992PTC065289)

9th Floor, Crescenzo, C-38 & 39, G Block,

Bandra-Kurla Complex,

Bandra (East), Mumbai-400051

Board Line: +9122 61793000

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