- SBI Mutual fund allows you to pay small SIPs on regular intervals
- SBI mutual fund SIPs spare you from the need to time the market
- SBI MF enables you to calculate your EMIs to meet your financial goal
The State Bank of India (SBI) Mutual fund, on its official website, www.sbimf.com, explains the scheme of things in a very lucid and succinct way website.
In case you choose to invest Rs 3,000 per month and expect a rate of return of 10 percent. After 20 years of regular investments in the SBI mutual fund, you can expect to receive Rs 22.9 lakh. One must note that the total cost of investment is Rs 7.2 lakh. Similarly, if you continue the SIPs for another 10 years, which means 30 years, your investment will grow to become Rs 68.4 lakh, while the total cost of investment stood at Rs 10.8 lakh.
In another illustration, the SBI mutual fund elaborates an illustration to explain as to how can one save (say) Rs 50,000 in a span of one year. In case the rate of interest is assumed to be 10 per cent, the monthly investment amount would come to Rs 3,946.
The three steps of starting an SBI SIP are as follows:
A. Assess your risk profile.
B. Set your desired instalment/ SIP amount
C. Invest in a suitable scheme
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1. SIPs in SBI mutual fund spare you the hassle of timing the market. The biggest factor that determines the growth of money is the price you pay to buy securities. For this, one must time the market, which means buying at the dips to be able to sell the rallies. However, when you make investments through SIPs, you don't need to time the market anymore.
2. You tend to get the benefit of compounding. This means your return keeps adding to the actual investment in the beginning, helping the overall return to increase further. When Rs 100 swells to Rs 120, the 10% return on the latter amount will turn out to be Rs 12 instead of Rs 10 earlier.
3. You don't need to track your investments on a daily basis. When you make investments via SIPs into SBI mutual fund, you can rest assured. Since the mutual fund is managed by the professional money managers, you are not required to keep a tab on the investments on a regular basis.
4. You can withdraw your investment in part or in full at any point of time.
5. The commitment of money is totally determined by the investor. One can choose any amount say Rs 1,000, Rs 1,500 or Rs 2,000 or even higher or lower depending on the depositor's risk appetite and availability of disposable income for the same.
Recently, the State Bank of India (SBI) posted heavy losses to the tune of $1.1 billion in the March quarter.
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