Indeed, if you are dreaming and want to reach a high point of financial independence with the gradual creation of wealth, Systematic Investment Plans (SIPs) are your greatest supporters. You can imagine converting a mere investment of ₹10,000 per month into an astonishing corpus of ₹14.44 crores in about 31 years! Sounds unbelievable? On how this can come true and the right investment to reap such extraordinary returns, here is the dissection.
The Power of SIP in Mutual Funds
Investing in mutual funds through SIP is one of the simplest and most effective ways to grow up with wealth. SIPs allow you to invest different amounts at one time regularly, with the market movements and the ability of compounding over the period; even small investments can change into life-shaping amounts.
SBI Long Term Equity Fund: A Machine for Wealth-Formation
The SBI Long Term Equity Fund, a high-performing mutual fund, will fall under this category. This fund has achieved massive returns of 17.94% on an average annual compounded basis since its inception in March 1993. This is how it works:
- Monthly Investment: ₹10,000
- Investment Duration: 31 years
- Final Corpus: ₹14.44 crore (as of March 28, 2025)
Double Benefits: High Returns + Tax Savings
Tax attractions are another reason why SBI LTEF is hand-in-glove attractive. It falls under ELSS, otherwise known as Equity-Linked Saving Schemes, where:
- Tax Deduction: 1.5 lakh rupees per year under Section 80C
- Lock-in Period: 3 years (shorter compared with other tax-saving options like PPF or even FD)
- This form offers high returns along with the option of lowering taxable income: Truly, both ways for intelligent investors!
Small Steps, Big Dreams: SIP Starting from INR 500-!
You don’t need to invest a lot to start. Investing in SBI LTEF allows you to kick-start your SIP monthly contribution with amounts as less as ₹500. The fund presently holds ₹27,730.33 crore AUM (Assets Under Management), indicating strong faith from valuing investors.
Key Takeaways for Smart Investing
- Start Early: The sooner you begin, the more you benefit from compounding.
- Stay Consistent: Regular investments, even in small amounts, lead to massive wealth accumulation.
- Think Long-Term: Equity funds perform best over 10+ years, so patience is key.
- Diversify: While SBI LTEF is a great option, consider spreading investments across different funds for balanced growth.