Here is an example for your consideration (*This is just an example, it should not be taken as the basis for making any investment decision, actual results may vary)
If you invest INR 1,00,000 (principal amount) for one year at 10% p.a. in mutual funds, then at the end of the year you can earn INR 10,000 as additional amount on it. Now, on reinvestment of the excess amount earned, the total maturity amount at the end of the year will be INR 1,10,000.
Similarly, if you stay invested for 20 years, without adding on the principal amount plus 10% interest rate, you can earn around Rs.6,00,000. This amount will result in compounding amount as opposed to INR 3,00,000 which you would have earned in total had the additional amount not been compounded over the years.
It is important to note that compounding can potentially have a huge impact as the life of your investment increases. Hence, investors are advised to start early and stay invested for the long term to enjoy
Benefits of compounding.
An investor education initiative.
meeting
www.icicipruamc.com/note To know more about the process to fulfill the Know Your Customer (KYC) requirement for investing in mutual funds. Investors should deal only with registered mutual funds, details of which can be verified on SEBI website
www.sebi.gov.in/intermediaries.html, For any queries, grievances and grievance redressal, investors may contact the AMC and/or Investor Relations Officers. In addition, investors can also file complaints on
https://scores.gov.in If they are dissatisfied with the proposals made by the AMC. The SCORES portal allows you to register your complaint with SEBI online and view its status later.
Mutual fund investments are subject to market risks, read all the scheme related documents carefully.