How Mutual Funds Grow Your Money: The Compounding Effect

Compounding is when your money earns returns, and then those returns also earn returns. It’s like a snowball rolling downhill, gathering more snow as it moves, growing faster and bigger the longer it keeps rolling.

Example:

• ₹10,000 invested at 12% annual return

• In 5 years = ₹17,623

• In 10 years = ₹31,058

The longer you stay invested, the more you benefit. SIPs boost this further because you keep adding money to the snowball. It’s like giving the snowball a push every month.

Conclusion

Think of compounding as your silent wealth partner. It doesn’t make a lot of noise in the beginning, just small wins here and there. But given time and patience, it grows into something remarkable. The earlier you start, the more powerful this effect becomes.

It’s not about how much you start with, but how long you stay. Even a small SIP, if consistent, can turn into something life-changing. Whether you’re saving for your child’s future, a dream trip, or early retirement, compounding works in the background- quietly, steadily, powerfully.

So start that journey today. Let your money breathe, grow, and multiply, literally, with the power of compounding and tools like Multipl to guide the way.