Rs 999 SIP For 30 Years Or Rs 9,999 For 10 Years: Which Investment Plan Delivers Better Returns?

Systematic Investment Plans (SIPs) have emerged as a reliable and accessible investment option, allowing individuals to grow their wealth systematically. By enabling consistent investments in mutual funds, SIPs help investors stick to their financial goals while benefiting from the magic of compounding. Compounding, often termed the eighth wonder of the world, ensures exponential growth of investments over time.

Here we delves into the significance of time in compounding by analysing two SIP scenarios: investing Rs 999 monthly for 30 years versus Rs 9,999 monthly for 10 years, both assuming a 12 per cent annualised return.

Understanding the Concept of CompoundingCompounding works by reinvesting returns, allowing your money to grow at an accelerating pace. The returns generated in the initial periods get added to the principal, which then generates additional returns in subsequent periods. Over time, this ‘return on return’ effect leads to exponential growth.

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