Mutual Funds: Monthly SIPs You Need to Deposit ₹79 Crore When You Turn 60

The 15 x 15 x 15 rule of mutual funds states that if an investor starts investing at the age of 25, then mutual fund SIP at the age of 25 for next 15 years with monthly SIP 15,000, the investor can expect to get 15 per cent returns on one’s SIP and 1 crore maturity amount. However, if we go by the views of tax and investment experts, then using the annual step up plan should increase the monthly SIP with the increase in your income. By doing this, the mutual fund investor will be able to maximize his returns as he will get higher compounding benefits over a long period of time.

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How to use the 15 x 15 x 15 rule of mutual funds, says Pankaj Mathpal, MD & CEO, Optima Money Managers, “By investing 15,000 per month in SIP mode, a mutual fund investor can expect to get 15 per cent return on his money after 15 years and hence the maturity amount would be approx. 1 crore. However, my suggestion to the mutual fund investor is to increase the monthly SIP by 15 percent after the completion of each one year, as one’s annual income increases by 12 to 15 percent and hence the monthly SIP amount increases by 15 percent. There will be no increase. Have a busy job. By doing this one will be able to get more 2 crore maturity amount after 15 years.

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Advising beginning mutual fund investors 15,000 at the start of career and keep investing till you retire,” says Jitendra Solanki, a SEBI registered tax and investment expert. 15,000 monthly SIP in equity mutual funds and continue investing till 60 years as it will enable them to maximize the benefit of early settlement in their career and grow the higher maturity amount in one’s retirement fund.”

On how investing early will benefit a mutual fund investor, Jitendra Solanki said, “If one starts a mutual fund SIP at the age of 25, he will be able to invest for 35 years, thereby earning higher compounding returns and maturity amount Will get.”

On the question of whether the mutual fund scheme chosen for the long term will survive for such a long period of time, Jitendra Solanki clarified, “If any asset Management If the company (AMC) closes down, another AMC will take over and the scheme will continue. At the time of acquisition, the new AMC gives two options to the old investors – to continue or to exit. If the investor agrees with the new AMC and its fund managers, he can continue with his mutual fund SIPs without any hassle. In case, he/she exercises the exit option, the investor can choose another suitable scheme and divert the maturity amount there and continue investing in SIP mode in the new scheme. This will allow the investor to continue with a long-term investment strategy without any impact on one’s investment goals.”

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Suppose a mutual fund investor starts 15,000 monthly SIP at the age of 25 and continue investing in it for the next 35 years, maintaining 15 per cent annual growth, as per the SIP calculator, one will get the maturity amount 79,16,51,398 or say around 79 crores.

among these 79,16,51,398, Investor Net investment amount will be 15,86,10,628 and the net return on one’s money would be 63,30,40,770.

Check out the mutual fund calculator below:

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Pankaj Mathpal of Optima Money Managers lists the following mutual funds on mutual fund schemes for the long term:

1]ICICI Prudential Large & Mid-Cap Fund;

2]Aditya Birla Sun Life Multi-Cap Fun; And

3]Nippon India Flexi Cap Fund.

Disclaimer: The views and recommendations given above are those of individual analysts or money management Companies, not Mint. We advise investors to do due diligence with certified experts before making any investment decision.