Building a Rs 50 lakh corpus through mutual fund SIPs does not require a large one-time investment. The monthly amount you need depends on your investment period and the return generated by the fund.
For an investor targeting Rs 50 lakh, a 15-year investment horizon can significantly reduce the monthly contribution required. At an assumed annual return of 12%, investing around Rs 10,100 a month for 15 years could potentially build a corpus of about Rs 50.45 lakh.
15-Year Target
The monthly SIP required changes as the assumed annual return changes.
At an 8% annual return, an investor would need to invest Rs 14,449 every month for 15 years. The total contribution would be Rs 26.01 lakh to target a Rs 50 lakh corpus.
At a 9% annual return, the required monthly SIP falls to Rs 13,213.
The monthly requirement drops further to Rs 12,064 if the investment generates an assumed annual return of 10%.
At an 11% annual return, the monthly SIP requirement falls to Rs 10,997. The investor would contribute Rs 19.79 lakh over 15 years.
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At 12% Return
At an assumed average annual return of 12%, investing around Rs 10,100 every month for 15 years could potentially create a corpus of approximately Rs 50.45 lakh.
- Monthly investment: Rs 10,100
- Investment period: 15 years
- Expected annual return: 12%
- Total investment: Rs 18.18 lakh
- Estimated returns: Rs 32.27 lakh
- Maturity corpus: Rs 50.45 lakh
The calculation highlights the effect of compounding over a longer investment period. The investor contributes Rs 18.18 lakh, while the estimated returns add around Rs 32.27 lakh to the final corpus.
Increase The SIP
Investors who want to reach the Rs 50 lakh target sooner can increase their monthly contribution rather than taking on additional investment risk.
For example, increasing the monthly SIP from Rs 10,100 to Rs 11,100 can help bridge the gap between the amount invested and the target corpus.
The figures are based on assumed annual returns. The actual value of a mutual fund investment can differ depending on the returns generated during the investment period.
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