A look at the various ways you can invest at least Rs. 20,000 each month and enjoy its benefits in the future
They say saving is a good habit. In fact, it is. After all, small drops can fill an entire ocean. This means that every little drop counts. Apply the same example to your money, your earnings. Who says you need to earn a lot to start saving? Simply saving a small amount of what you earn or own can yield big rewards one day. For example, if your monthly income is around Rs. 80,000 – Rs. 100,000, you can comfortably save a minimum of, say, Rs 20,000 every month. However, is saving enough? To earn profitable returns on your savings, it is vital to invest this money.
This blog sheds light on some of the key areas that you can consider investing at least Rs. 20,000 monthly and how to double your money in the process. He also discusses the benefit of using a SIP calculator to accurately determine the likely returns on your investment.
Invest Rs. 20,000 in SIP Monthly for 10 Years
One of the best ways to consider investing in rupees is a Systematic Investment Plan or SIP as it is popularly known. Many people who want to invest an amount of Rs. 20,000 long term, say 10 years, prefer SIP. It can be said that it is undoubtedly the best SIP plan for 10 years.
SIP is highly recommended for small investors who are looking to invest smaller amounts like INR 20,000 to get a good return on investment (RoI). It is also the best way to invest in the Mutual Fund market. In addition, since the investment is made for a term of 10 years, it is important to maintain consistency in your investment habits. The same amount of Rs. 20,000 must be invested unfailingly. However, the investor can decide the frequency of the SIP plan. They can decide if the investment is made monthly, quarterly or annually.
What is the average SIP throughput at Rs. 20,000 Investment?
Now let’s quickly look at the overall value of return to the investor in a SIP investment under different schemes or securities. The overall value range of mutual fund SIPs has remained constant between 12 and 18% for the past several years. With an average SIP value of 12% per year, the investor is likely to earn the following returns on their investment:
| amount invested | Investment Period | return of investment |
| Rs. 20,000 | 5 years | Rs. 17 lakhs |
| Rs. 20,000 | 10 years | Rs. 47 lakhs |
| Rs. 20,000 | 15 years | Rs. 1 million rupees |
| Rs. 20,000 | 20 years | Rs. 1.9 crores |
| Rs. 20,000 | 25 years | Rs. 3.5 crores |
| Rs. 20,000 | 30 years | Rs. 6.4 crores |
The above table indicates that on a constant investment of Rs. 20,000 at an average annual rate of 12%, the investor is likely to earn Rs. 47 lakh after 10 years. If they continue to invest the same amount (INR 20,000) consistently for 15-20 years, this ROI is expected to gradually increase, even double the original amount invested. For example, the average SIP return over 20 years is likely to be around INR 1.9 crore.
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Why use a SIP calculator?
A SIP calculator is a simple online tool used by investors to get an accurate estimate of the returns on investments they have made in mutual funds through SIP. A SIP calculator has the following benefits:
- Allows easy and immediate calculation of ROI
- It is free to use and easily available online.
- The tool can be customized to meet your needs.
- The calculator can also accommodate lower limits and consequently identify products available in a lower price range.
How does a SIP calculator work?
The Annual SIP Yield Calculator is designed to calculate the exact return on investment using the following formula:
Invested amount x {(1 + Periodic interest rate) Total number of payments – 1} / Periodic interest rate x (1 + Periodic interest rate)
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summarizing
It is recommended to start the habit of investing from an early age in order to get maximum benefits after a certain period. In this blog, we look at the average return on a constant investment of Rs. 20,000 for different periods, from 10 years to 30 years. You can choose the investment duration and payment flexibility according to your needs and convenience. Depending on your investment, and as long as you stay consistent with practice, you can expect to get a decent return on your money invested.
To calculate your returns, the best way is to use a SIP calculator. It uses a systematic approach to calculate the earnings on money you have consistently saved as an investment over a specified period of time. PayBima allows you to use the free SIP calculator on their website. Also, while you’re there, don’t forget to check out the various SIP schemes on our website and choose the one that best suits your investment needs.
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FAQ: Best Way To Invest Rs 20,000 Per Month In 2023
What is the 50-30-20 rule?
The 50-30-20 rule suggests that you should spend 50% of your earnings on needs, 30% on wants, and set aside at least 20% for savings.
What happens if you invest 20,000 a month in SIP?
Invest Rs. 20,000 every month for 10 years means a total of Rs. 24 lakh invested. The return on this constant investment is approx. Rs. 47-48 lakh, which is double the amount originally invested for 10 years.
What is the rule of 10 5 3?
The 10-5-3 rule states that it is prudent to expect a 10% return on a long-term equity investment, a 5% return on debt instruments, and a 3% average return on bank savings accounts.
Is SIP better than FD?
A Systematic Investment Plan is considered a better investment tool than Fixed Deposits due to factors such as diversification, investment flexibility, higher return on investment, and tax advantages.
Is SIP tax free?
Yes, SIP is in the EEA or Exempt, Exempt, Exempt category, which means that the amount of money invested, the amount due at maturity, as well as the amount withdrawn, are all exempt from paying taxes.
Which SIP company is the best?
Some of the best SIP mutual funds in India in 2023 are:
~ Direct Growth BOI AXA Small Cap Fund
~ Direct Growth Quantitative Tax Plan
~ Direct Growth Quantum Infrastructure Fund
~ Edelweiss Government Securities Fund Direct growth