Are you considering investing in any place as well? But unsure of where to do it? If you are in need of assistance, this article is tailored for you. Investing one million rupees at once, or one thousand rupees annually for ten years. Which plan offers higher profitability for investing money in? Understanding the distinction between mutual fund lump sum and systematic investment plan (SIP) is essential for comprehension. Currently, a lot of individuals are putting their money into these two locations in order to gain financial advantages.
One-time investment in a mutual fund
According to experts, investing Rs 1 lakh in a mutual fund lump sum can result in an annual interest of around 10 percent. In 10 years, he will receive Tk 2.59 lakh as interest income. If the free market system is superior, he can obtain more than that.
Investing in SIP
Alternatively, with a SIP of Rs 1,000, the customer will receive Rs 2.06 lakh including interest after 10 years. For this particular scenario, he plans to put in an investment of Rs 1.2 lakh. Meaning, the investor will receive a smaller return by investing beyond the lump sum amount in the mutual fund.
Nevertheless, there are multiple factors that the client must consider when engaging in this form of investment. To begin with, putting money into lump sum mutual funds carries a higher level of risk compared to investing through SIP. In the event of market volatility, customers are at a higher risk of experiencing losses. However, in the short run, the SIP index remains unaffected by market volatility.
