Mutual Fund SIP Calculator- Ravi Ujjwal is a 40 year old salaried professional and he is planning to invest for the higher education of his 6 year old daughter. As per Ravi’s estimation, he will need around Rs 1 crore for his daughter’s higher education and he wants to meet this investment goal by starting an investment today. Ravi is not in a mood to invest in stocks as he does not have much time to monitor his portfolio and fundamentals of listed companies and most importantly he does not have lump sum amount to invest.
Speaking on whether equity mutual fund in SIP mode is the most suitable option this investment is viable or not, SEBI Registered Tax and Investment Expert Jitendra Solanki said, “As the investor does not want to invest in direct stock market and his daughter is already 6 years old. He needs to deposit Rs 1 crore in 10 years as her daughter will be eligible for higher studies in around 16-18 years.” Solanki said that Equity Mutual Fund in monthly SIP mode is the most suitable investment option which an investor can look for as he is short of lump sum amount for lump sum investment.
Do an annual step-up of 20 per cent in monthly SIPs
Agreeing with Jitendra Solanki’s views, according to Karthik Jhaveri, Director of Wealth at Transcend Capital, investing in mutual fund SIPs for 10 years is expected to yield at least 12 per cent p.a. But investors are advised to do an annual step-up to achieve the target of Rs 1 crore in 10 years. It helps the investor to start investing with the lowest possible amount. Normally the annual step-up is around 10-15 per cent, but to achieve such an ambitious investment goal, I advise an investor to maintain an annual step-up of 20 per cent in the monthly SIP amount.
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So, if Ravi or any other investor maintains a 20 per cent annual step-up for his 10-year SIP, assuming 12 per cent annual return, one has to start a monthly SIP with Rs 21,000. This is a suggestion of SIP calculator. Mutual funds on SIP schemes which can give 15% return in 15 years.
Vineet Khandare, CEO & Founder, MyFundBazaar India Private Limited, listed the following SIP schemes for investment-
Small-Cap Fund- SBI Small Cap Fund- Regular Growth
Mid-Cap Fund- Aditya Birla Sun Life Mid Fund- Growth Regular Plan
Large- Cap Fund- HDFC Top 100 Fund – Regular Plan Growth
(Disclaimer: The suggestions are provided by experts and not by Tax Concept and its Author. Therefore, Tax Concept and its Author will not be liable for any loss arising due to reading this article.)