- To build a Rs 10 lakh corpus, monthly SIPs vary with different return rates
- At 8% returns, Rs 25,000 monthly for 3 years can achieve the Rs 10 lakh goal
- At 12% returns, Rs 23,000 monthly for 3 years is needed to reach Rs 10 lakh
When it comes to financial goals, a common target that most investors, especially youngsters, set for themselves is to build a Rs 10 lakh corpus. Whether it is for wealth creation, educational purposes or other reasons, individuals must know how much they are required to invest on a monthly basis to reach their target. Ultimately, the challenge here lies in understanding how your monthly contributions are directly affected by different rates of return.
To harness the power of compounding, individuals need to follow a disciplined investment strategy. This can be done through systematic investment plans (SIPs). The amount an individual is required to pay will be significantly higher at lower return rates, while the same target can be achieved with a lower monthly burden through higher return rates.
However, investors must know that often higher returns come with increased risks. By comparing monthly investment requirements across different return rates, investors can make informed decisions to fulfil their financial goals.
Rs 10 Lakh Target: Monthly SIPs Required At Various Return Rates
To achieve the target of Rs 10 lakhs, a suitable choice is the SIPs, as they offer market-linked returns. For individuals planning to kickstart their investment journey today to build a Rs 10 lakh corpus, here's how much SIP investments they need to make at different expected annual return rates.
Scenario 1: Mutual Fund SIPs At 8% Interest Rate
Monthly investment: Rs 25,000
Tenure: 3 years
Expected returns: 8%
Total investment: Rs 9,00,000
Estimated returns: Rs 1,20,145
Total value: Rs 10,20,145
Crorepati Goal: 5 Mistakes To Avoid To Ensure You Don't Go Off TrackAt the same interest rate, individuals would be required to pay Rs 14,000 per month to earn Rs 10,35,534 for a duration of five years. Also, your monthly SIP will be Rs 6,000 to get 11,04,994 in 10 years.
Scenario 2: Mutual Fund SIPs At 12% Interest Rate
Monthly investment: Rs 23,000
Tenure: 3 years
Expected returns: 12%
Total investment: Rs 8,28,000
Estimated returns: Rs 1,72,676
Total value: Rs 10,00,676
For a five-year period, an investor needs to pay Rs 13,000 per month to get 10,72,323, when the expected rate of return is 12%.
Similarly, you can make Rs 11,61,695 by investing Rs 5,000 on a monthly basis at the same interest rate.
Scenario 3: Mutual Fund SIPs At 15% Interest Rate
Monthly investment: Rs 22,000
Tenure: 3 years
Expected returns: 15%
Total investment: Rs 7,92,000
Estimated returns: Rs 2,12,948
Total value: Rs 10,04,948
At this return rate, your monthly investment will be Rs 12,000 to get 10,76,180 in five years and Rs 4,000 per month to get 11,14,629 in a 10-year period.
Individuals need to know that the actual returns on SIP investments vary due to market conditions and other factors. Overall, they need to invest a lower SIP amount if the interest rate is higher to reach the 10 lakh target.
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