Rs 30,000 Monthly SIP: What The Final Corpus Looks Like At Different Return Rates
An SIP allows you to invest a fixed amount every month into mutual funds.
Building wealth in today’s world requires more than just saving money. It requires smart and consistent investing. One of the simplest and most effective ways to do this is through a Systematic Investment Plan (SIP).
SIP allows you to invest a fixed amount every month into mutual funds, making investing disciplined and manageable, even if you don’t have a large lump sum to invest upfront.
Understanding SIP And Compounding
The real strength of SIP comes from the power of compounding, where your money not only grows with the returns it earns but also generates returns on those returns over time. This compounding effect can turn modest monthly investments into substantial sums over long periods.
For instance, investing Rs 30,000 every month might seem like a regular expense today, but over the years, it can accumulate into lakhs or even crores, depending on the investment horizon and the returns achieved.
Short-Term Investment: 5 Years
If you invest Rs 30,000 monthly for 5 years, assuming an annual return of 12%, your total investment would be Rs 18 lakh. The final corpus could grow to around Rs 24-25 lakh. This shows that even in a short period, a disciplined SIP helps your money grow beyond the invested amount, giving a gain of over Rs 6 lakh in five years.
Medium-Term Investment: 10 Years
For a 10-year horizon, the benefits of compounding become more pronounced. With the same monthly SIP and 12% annual return, your total investment of Rs 36 lakh could grow to approximately Rs 70 lakh.
Long-Term Investment: 15-25 Years
The biggest impact of SIP is seen in the long term. A monthly investment of Rs 30,000 over:
15 years: With returns of 12-16%, your corpus can range from Rs 1.4 crore to Rs 2 crore.
20 years: At 12-14% returns, the corpus may reach Rs 2.7-3.5 crore.
25 years: With 12-16% returns, the final corpus could grow to Rs 5-9 crore.
Tips To Invest In SIPs
Start early: Investing in your 20s gives you decades of compounding, which can significantly increase your corpus.
Patience matters: Short-term investments may not seem large, but letting them grow over decades creates substantial wealth.
Discipline is key: Consistently investing and leaving the corpus untouched ensures maximum compounding benefit.
Plan for the long term: Even a 5-year SIP can become a foundation for retirement planning if allowed to grow over 20-30 years.
