Compounding and its Power on Mutual Funds

By Ashish Kyal -

One can understand the effects of compounding in case of PPF, NCS, FD etc. These instruments earns interest which is added to the principal and futher the individual earns interest on the entire amount i.e the principle amount + the amount earned from interest.

One can go through the below Info graphs in order to understand the concept of mutual fund.


Power of Compunding


Power of Compounding


Image Courtesy – ICICI MF


Thus, the Option of Compounding with less risk is only available in Mutual Funds. SIPs for a long term can result into great returns.

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