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HomePersonal FinancePut 'booster dose' of earning in mutual funds, you will get more...

Put ‘booster dose’ of earning in mutual funds, you will get more profit than FD

SIP Booster is a facility that gives the option to the investors that they can increase the SIP installment by a fixed amount repeatedly at a specified interval.

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The mutual fund industry has come out with some good news in the recent past. (Mutual Fund Industry) The people are looking very happy. Net investment of Rs 25,076 crore in equity based schemes in December 2021 (Investment) Has happened. In November 2021, an investment of Rs 11,614 crore was made in this. In one month, there was an impressive growth of 116% in it. AMFI Organization of Mutual Funds (Association of Mutual Funds in India) According to this, the figure of investment from SIP in the year 2021 has been increasing every month. Investment through SIP increased to Rs 11,305.34 crore in December 2021. In November 2021, an investment of Rs 11,004.94 crore was made through SIP.

Growing equity investment

Ashish P. Somaiya, CEO, WhiteOak Capital Asset Management, says that this is probably the highest equity investment ever in the mutual fund industry. If the growth continues at the same rate, then in a year, 30 percent of the total assets of this industry, ie AUM, will become equity.

Market experts believe that considering the current situation, mutual fund investors should now consider opting for booster options, also known as top-ups.

What is SIP Booster

SIP Booster is a facility that gives an option to the investors to increase the SIP installment by a fixed amount repeatedly at a fixed interval. This gives investors the flexibility to invest a higher amount during SIP.

You have to keep in mind that the booster facility of SIP can be applied for at the very beginning i.e. at the time of registration of any SIP. Now the question arises that if someone is already running a SIP, then what should he do for the booster facility? For this, the only way is to cancel the old SIP first and apply for investment in the new SIP with the booster facility.

How does Booster Dose work?

Let us explain with an example how this feature works. Suppose Surendra starts investing in SIP every month to increase his retirement savings. He starts investing 20 thousand rupees in SIP every month in an equity mutual fund for the next 20 years. They hope that in this they will get a return of at least 11 percent. In this way, Surendra feels that he will have a retirement fund of Rs 1.75 crore on a total investment of Rs 48 lakh.

Now suppose Surendra decides that he will boost or top-up his monthly SIP by 10 percent every year. So with this, Surendra will get a fund of about Rs 3.20 crore with a total investment of Rs 93.60 lakh. That is, by increasing the SIP amount every year by just 10 percent, Surendra will get an additional fund of Rs 1.46 crore. A 10 percent booster in the SIP of 20 thousand means that it will have to increase by two thousand rupees every year.

What do experts say

Shweta Jain, Founder, Investography says that if you want to see your fund grow, then this is a good option to boost your equity investments. But it should be kept in mind that this is true for the long term. Those who need something soon, they can recover profits. If you don’t need the money soon, give it time to keep growing.

Money9’s advice

Top-up or Booster SIP works in an auto-pilot mode. That is, once you choose the option, then every year the fixed increase will be done automatically. Therefore, whenever you want to boost your SIP, it saves you from the hassle of starting a new SIP. SIP Booster helps you to get your stipulated corpus much ahead of time.

– Himali, Money9

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