Stocks SIP is a way to systematically invest in shares. Instead of buying the units in a mutual fund scheme investors invest directly in shares. Stocks SIP makes it easier for investors to put their money in adisciplined manner for a predetermined number of shares. You can set the SIP on a monthly, fortnightly, weekly, or daily basis.
Starting a Mutual Fund SIP comes with a cost i.e., the Expense Ratio related to that fund. A higher expense ratio means a higher proportion of the return being removed, thereby leaving you with a low return on investment. Avoid Expense Ratio by starting a Stock SIP with RMoney & Earn Higher Returns.
Suppose you invest Rs.1,00,000/- in mutual funds for 10 years at a 10% rate of return but pay an expense ratio of 2%. The final return on your investment will be 8% (10%-2%) which equals an amount of Rs.2,15,892 post compounding.
While on the other hand, if you invest the same amount in Stock SIP for 10 years at a 10% rate of interest the final amount earned will be Rs. 2,59,374 as you need not pay any expense ratio.
Investment Amt. p.a. | Rate of Interest | Time | Return after 10 years |
---|---|---|---|
1,00,000 | 10% | 10 | 2,59,374 |
1,00,000 | 8% | 10 | 2,15,892 |
Difference in returns | 43,482 |
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