The investment landscape in India has significantly transformed in the last few years with the emergence of new-age fintech companies. The tech-driven platforms have made wealth accumulation more convenient by increasing access to a wide range of investment instruments. A disciplined approach and consistent investment over a long-term horizon can help investors reach a remarkable milestone like Rs 1 crore without any hassle. If you are looking forward to becoming a crorepati, systematic investment plans (SIPs) could be a suitable option.
A mutual fund SIP allows investors to invest a fixed amount at a regular interval, like every month, depending on their financial goals. In recent years, SIPs have become popular among investors in India due to multiple factors like higher returns compared to traditional instruments, better flexibility and the option to invest small amounts every month.
-
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI -
"I Am A Material Man In A Material World': Quantum Advisors' Ajit Dayal On NDTV Profit Ignite
However, it could be confusing to decide how long you should stay invested. Generally, financial experts advise a long-term horizon for SIP investments to maximise the benefits of rupee cost averaging and the power of compounding. The longer the tenure, the higher your earnings from SIPs. As per industry trends, over a long-term horizon, most equity mutual fund SIPs have given double-digit returns.
If you are looking forward to building a corpus of Rs 1.5 crore with a monthly SIP of 11,000, a long-term strategy could be crucial for achieving the target. It may seem difficult to reach your goal of Rs 1.5 crore with just Rs 11,000 per month. However, it can be easily achieved.
Rs 11,000 Monthly SIP To Reach Rs 1.5 Crore Goal
As per historical trends, equity mutual funds have offered average returns of 12% per annum for SIP investments over a long-term horizon.
Assuming an average annual return of 12%, let's see how long it will take to build a corpus worth Rs 1.5 crore.
Monthly Investment: Rs 11,000
Investment duration: 23 years
Expected interest rate: 12% per annum
Invested amount: Rs 30,36,000
Estimated returns: Rs 1,31,67,630
Total value: Rs 1,62,03,630
As seen from the above calculation, you can easily surpass the target of Rs 1.5 crore in nearly 23 years with a modest investment of Rs 11,000 per month via SIPs at an assumed return of 12% per annum.
For many investors, a commitment of Rs 11,000 every month for 23 years could be financially straining. However, you can achieve the target of a Rs 1.5-crore corpus within a shorter tenure through a step-up SIP. Many mutual fund SIPs come with the step-up feature, which allows investors to increase their investments by a certain percentage periodically, generally every year.
With a 10% annual step-up, you can conveniently achieve the target of Rs 1.5 crore in just 18 years through the same SIP investment of Rs 11,000 per month. Let's see the calculation:
Rs 11,000 Monthly SIP With 10% Annual Step-up
Monthly Investment: Rs 11,000
Investment duration: 18 years
Annual Step Up: 10%
Expected interest rate: 12% per annum
Invested amount: Rs 60,19,090
Estimated returns: Rs 98,37,038
Total value: Rs 1,58,56,129
A long-term horizon is crucial for accumulating Rs 1.5 crore through a monthly SIP of Rs 11,000. The extended tenure helps in mitigating market risks through rupee-cost averaging. On the other hand, the power of compounding helps in increasing overall profitability. So, it's important to build a long-term investment plan to reach a big target like Rs. 1.5 crore. However, as the SIP returns are not guaranteed due to market volatility, investors should evaluate all risk factors before investing.
Disclaimer: This article is only for informational purpose. NDTV Profit advises readers to consult with their own financial or investment adviser before taking any investment decision.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.