How to Build ₹1 Lakh Fund with SBI Mutual Fund: Complete Investment Guide.


How to Build ₹1 Lakh Fund with SBI Mutual Fund: Complete Investment Guide. 

 Hello friends,

In today's blog, I will explain how you can invest ₹1,000 monthly in SBI's Mutual Fund for three years and potentially create a fund worth ₹1 lakh. We'll explain this in detail through examples. Everyone has different financial goals, such as saving for a daughter's wedding, a son's education, or planning for retirement. Today, we will discuss an SBI mutual fund that can help you achieve your goals through disciplined investment.

We are talking about the SBI Magnum Mid Cap Direct Plan Growth mutual fund. Currently, its NAV (Net Asset Value) is ₹62.52. NAV represents the per-unit price of a mutual fund. Let’s take a look at its returns:

6 months: 12%

1 year: 35%

3 years (annualized): 22%

5 years (annualized): 39%

All-time average annualized return: 22%

This fund was launched on January 1, 2013, and has managed investments worth ₹22,338 crores so far. The expense ratio of this fund is 0.77%.

Investment Options:

1. Lump sum investment: Minimum ₹5,000, no upper limit.

2. SIP (Systematic Investment Plan): Minimum ₹1,000 monthly, no maximum limit.

Flexibility in Withdrawals:

You can withdraw your investment anytime. However, if you withdraw within one year, there is a 1% exit charge.

Tax Implications:

Long-term capital gains above ₹1 lakh are taxed at 20%.

Short-term capital gains are taxed at 12.5%.

How to Maximize Your Returns:

To beat inflation, which in India is around 6-7% yearly, you can use a Step-Up SIP strategy where you increase your SIP amount by 10% annually. Let’s calculate the returns:

1. Option 1: Normal SIP

Invest ₹1,000 monthly for three years.

Total investment: ₹36,000.

Total fund value (assuming 19% annualized return): ₹48,785.

2. Option 2: Step-Up SIP (10% annual increase)

Increase monthly SIP by 10% each year.

Total investment: ₹42,273.

Total fund value: ₹53,187.

3. Option 3: Long-term lump sum growth

Continue investing ₹1,000 monthly for three years, then leave the fund untouched for 25 more years.

Total investment: ₹53,187 (Step-Up SIP strategy).

Total fund value after 25 years: ₹41.39 lakhs.

This demonstrates the power of compounding. By giving your investments time, you can build a significant fund to meet your financial goals, like a child's education, wedding, or retirement.

Final Thoughts:

This video is for educational purposes. Always research thoroughly before investing in mutual funds, as they are subject to market risks. Let us know your thoughts in the comments. If you have any suggestions for future videos, feel free to share them.


Thank you. 

Taken from source. 


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