If you want to make the best use of compounding, you should start early. The longer the investment period, the better are the chances of significant returns. A longer time period will earn you more profits due to the compounding effect. This is why you should start your financial planning as early as possible and let compounding work for you. Investing early ensures that you have a sizeable corpus at the time of your retirement. Also, in case of some eventuality, your family and dependents will have something to fall back on.
Let us consider the same example as above.
However, when the same amount is invested at a 14% rate of interest, it would be around 6.87 lakhs.
You can see how a small change in the rate of interest can significantly impact your returns. It is thus advised to plan, research and then make an investment carefully.
Do your research before deciding on an investment avenue. Do not be misled by advertisements and tall claims made by the salespersons. It is always advisable to conduct your research regarding the risks and other terms and conditions of the investment you will be making.