What is SBI Mutual Fund SIP – Everything to Know About SIP

The Systematic Investment Plan (SIP) is a type of investment where the money is invested on a regular basis like weekly, monthly, quarterly, bi-quarterly or yearly etc.

In SIP, the money is invested in the mutual funds and due to its regularity, the risks of losing money becomes negligible.

By investing in the SIP’s, you can enjoy life to the fullest because the power of compounding does the things for you. You just have to invest the money on a regular basis.

Why Invest in SIP? How Does SIP Work?

If you invest in SIPs then you do not have to worry about the market timings. Because of the regular investment, it will ensure that you are investing in a platform where the market high’s and low’s are not important.

This makes an opportunity for you to invest the money in a low-risk platform and also, it will not be difficult for you to predict the money in advance.

SIP investments are wise mutual fund investments as it has the power of compounding. If you invest early then returns will be multiplied higher. Therefore it has a saying that –

EARLY INVESTMENTS = MAXIMUM EARNINGS

When you start a SIP then you are creating your long term future wealth. It is better than lumpsum investment because its investments are on a regular basis, so, the risk of losing become almost nil.

So, leave your stress and start a SIP today for long term future wealth.

SBI Mutual Fund SIP
SBI Mutual Fund SIP

SBI Mutual Fund SIP in Equity Funds

For a long term wealth creation, investment in Equity Funds offers a great opportunity. In Mutual funds investments, you get access to experienced fund managers whose expertise helps you to identify the real growth opportunities and making wise investment decisions.

SIP over a long term helps you to create your real wealth. So start SIP for at least 10 or more years. It’s better if you invest the money for 25 to 30 years for maximized earnings.

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Example Of SIP Income

Now I shall explain the power of SIP with an example so that you know about the real power of compounding.

Let’s say, Mr Sanjay started a SIP of Rs. 3000/month at an age of 25 with an average rate of interest of 10% (say) and continued till the age of 60.

And on the other hand, Mr Ranveer started a SIP of Rs. 3000/month at an age of 30 with an average rate of interest of 10% (say) and continued till the age of 60.

Now, let’s check who earns more at the –

NamesRate of
Interest
No Of YearsTotal Amount
Earned
Total Profit
Mr Sanjay
(3000/month)
10% 35 1,14,84,8301,02,24,830
Mr Ranveer
(3000/month)
10% 30 68,37,976 57,57,976

Clearly, you can see the results above who have earned the most. Both of them have invested the same amount of money with the same rate of interest but the difference is their years of investment.

Mr Sanjay started early so the total profit he earned was maximum at the end. But Mr Ranveer had started little lately so the earnings are low as compared to MR Sanjay.

Here I have explained an example of SIP with a 10% rate of interest but usually, in the long term, most SIPs gives an average of 15 to 20% rate of interest.

So, if we take an 18% interest rate for the same amount and for the same duration then they will earn as follows –

Mr Sanjay will earn an amount of Rs. 10.5 Crores (10,52,92,463).

Mr Ranbir will earn an amount of Rs. 4.3 Crores (4,29,75,868).So it has the saying that Early Investment = Maximize Earnings

Diversify Your SBI Mutual Fund SIP Investments

It’s better if you diversify your mutual fund investments. As this will increase the stability of the investment even in a volatile market and also it will ensure that your future plans are on the safe side.

Usually, the Large Cap funds are diverse funds, so investing in that will ensure good returns.

It’s better to invest in the direct Nifty Index Fund as this fund is related to our economy. So when the economy increases your returns will also get increased.

Some Popular SBI Nifty Index Fund (For SIP Investment)

  • SBI Nifty Index Fund – This fund also has a moderately high risk. It has a return rate of nearly 14.05% since its inception from 17th January 2002. SBI Nifty Index Fund is open-ended equity scheme which invests in the stocks comprises of Nifty 50 index funds.
  • SBI – ETF Nifty Bank – This fund also has a moderately high risk. It has a return rate of nearly 11.14% since its inception from 2nd March 2015. SBI Technology Opportunities Fund is an open-ended scheme which trades in exchanges.
  • SBI – ETF Sensex – This fund also has a moderately high risk. It has a return rate of nearly 12.79% since its inception from 09th February 2013. SBI – ETF Sensex is a scheme which trades in exchanges.
  • SBI – ETF Nifty Next 50 – This fund also has a moderately high risk. It has a return rate of nearly 18.96% since its inception from 09th September 2009. SBI – ETF Nifty Next 50 is an open-ended equity scheme which predominantly invests in the Small Cap Stocks.
  • SBI – ETF Nifty 50 – This fund also has a moderately high risk. It has a return rate of nearly 08.21% since its inception from 17th July 2015. SBI – ETF Nifty 50 is an open-ended scheme which trades in exchanges.

Or you can check directly on their website here.



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