As an investor, what are the main things you must consider before you choose an asset class to park your money in? The facets to keep in mind, when creating your unique investor personality, include your risk appetite, return requirements, time horizon and investment goals. Based on your return requirements, you can adjust your risk appetite optimally. For instance, if you require stable returns, you can choose safer assets such as debt funds or large cap equity funds. Alternatively, if you need high returns, you would need to tweak your risk appetite towards the higher end. SIP return rate is, therefore, an integral part of your investment decision. An SIP or systematic investment plan is an excellent means to invest in different types of mutual funds and knowing the SIP interest rate can help you zero in on the right asset for your requirements. Let us take a look at aspects such as SIP return percentage and mutual fund SIP interest rate, to ensure an optimal investment journey.
Average return on SIP investment
Firstly, you must note that the SIP return rate varies, in line with the different types of SIP available. For instance, if you invest in a large cap equity fund, your average returns can vary between 12-18%, while mid-cap funds may offer returns of 14-17%. Further, a long-term fixed income fund may offer you returns of 6-9%, on a yearly basis[1]. In the case of SIPs, even modest investments, when consistently maintained over an extended period of time, with discipline, particularly in growth-oriented assets like equities, have the potential to yield significant returns. However, unlike fixed deposits, SIPs do not offer a fixed rate of return. Alternatively, SIPs offer the advantage of capitalising on market fluctuations, as the invested units are acquired at various prices, resulting in a lower average cost over time.
How much can you earn through SIP?
Now that you have a good idea about the SIP return rate, you can understand that the SIP investment interest rate is not actually a rate of interest but the returns that the scheme offers you, at the end of your investment period. So, how much can you actually make through your SIP investments? This aspect depends on the type of SIPs you invest in. As discussed earlier, investing in growth-oriented assets such as equities can offer you higher returns, on average, than comparatively more stable assets such as debt mutual funds. Further, within equities, if you invest in small or mid cap equity schemes, your SIP will earn more returns than when you invest in a comparatively less risky large cap fund. Within debt funds too, your SIPs in lower-rated corporate bonds will offer you better returns, albeit at a higher risk, than your investments in sovereign bonds. Therefore, how much you can earn through SIP will depend on the mutual fund scheme you choose to invest in. And this choice should be made on the basis of your risk appetite, returns requirements and time horizon. It is always advisable to invest in diversified SIPs, across your chosen asset classes, to ensure maximum returns at the minimum possible risk. Further, you can use the Edelweiss Mutual Fund SIP calculator to arrive at your required return rate, to achieve your financial target in the pre-decided time horizon. Here is a step-by-step guide on how to use this free and efficient online SIP calculator optimally.
How to use the Edelweiss MF SIP calculator?
The Edelweiss Mutual Fund SIP calculator is a user-friendly, free tool that is accessible at your convenience, allowing you to formulate your personalised SIP investment plan. To utilise the Edelweiss Mutual Fund SIP calculator, follow the steps outlined below:
- Access the Edelweiss Mutual Fund website or app and open the SIP calculator. You can do this by simply typing in Edelweiss Mutual Fund, in your browser, if you are not using the app.
- When you find the calculator, you can input the desired monthly investment amount in the space provided.
- You should also specify the expected annual return rate to arrive at the right calculation.
- Finally, select the investment tenure or time period and add it in the space provided.
Upon completing these steps, the Edelweiss Mutual Fund SIP calculator will promptly present you with a comprehensive overview of your investment, including the total value, invested amount, and estimated returns. Using this simple and free calculator, you can easily plan out your SIPs and begin your investment journey.
Now that you have a good idea about average SIP return rate, and the factors that affect this important figure, you can choose the right mutual fund scheme and start your investing journey in a hassle-free manner. Who said you should not count your chicken before they hatch?
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS. READ ALL SCHEME-RELATED DOCUMENTS CAREFULLY
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
