The timeless emotions of love, case and protection between a brother and his sister are the foundations Raksha Bandhan. If you want to step out of banality and gift your dear one something novel, you can easily think of a systematic investment plan (SIP) in a mutual fund scheme.
The immense power of compounding can easily turn small amounts of investments into a big element of financial security for your dear sister – something that will not only surprise her but also act as a shield for very long years.
High returns from several funds
Did you know that though online mutual fund calculators mention default rate of returns as 12%, in real life several mutual fund schemes have delivered well over 20% over periods as long as 10 years. Some prominent examples are SBI Small Fund, HSBC Small Cap Fund, Nippon India Small Cap Fund, Kotak Emerging Equity Fund, Axis Small Cap Fund, Edelweiss Mid Cap Fund, DSP Small Cap Fund, Quant Large and Mid Cap Fund. In a report in end-July 2024, these delivered returns well over 20%.
High returns for many years
Though investment strategists continue to remind us that past performance is not necessarily an indicator of future performance, many funds continue to deliver that rate of returns for years together.
If you can gift your sister one such scheme, it can generate big pool of money for her without a concomitant commitment from you in the long term. Let’s get down to some number crunching.
SIP Calculator
With 20% return
For the sake of simplicity and conservatism, let’s take 20% as the rate of return. A monthly SIP of only Rs 5,000 can generate returns of more than Rs 47 lakh – Rs 47,71,475 to be exact – over just 15 years. The total value at the end of 15 years will be Rs 56.71 lakh.
Close to Rs 1 crore
If you manage to put your SIP in a fund that clocks a 25% return – SBI Small Fund and Nippon India Small Cap Fund actually achieved growth significantly more than 25% over 10 years – you will be surprised at the accumulation. It would turn Rs 5,000 SIP into something close to Rs 1 crore – Rs 97,78924 to be exact – in 15 years flat.
(Disclaimer: This article is only meant to provide information. News9live.com does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)
Mutual Fund SIP calculator: This year Raksha Bandhan is on August 19. Gifting a piece of financial security can be one of the most understated signs of love for your sister. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
