How much SIP will have to be done every month to create a corpus of Rs 1 crore in 5, 10, 15 and 20 years? See the exact calculation here

Nowadays, every working and middle class person in India has a dream to have a big and secure fund of at least Rs 1 crore for the future. In the present era, Systematic Investment Plan i.e. SIP of Mutual Fund has become the easiest and reliable means to achieve this financial target. But often people remain confused that how much money will they have to invest every month from their pocket to reach the magical figure of Rs 1 crore? Let us know how you can become a millionaire in 5, 10, 15 and 20 years with the power of compounding.

magic of compounding

The biggest rule of investing in mutual funds is timing. The younger you are and the longer you invest, the faster the magic of compounding will work on your money. If you start late, you will have to invest a huge amount every month, whereas if you start early, even a monthly SIP of just a few thousand rupees can make you a millionaire. Experts have prepared a roadmap of Rs 1 crore assuming an average annual return of 12 percent in long term equity mutual funds.

Complete mathematics of Rs 1 crore fund

In SIP the investor invests a fixed amount every month. Even small savings can turn into a big fund by getting the benefit of compounding in the long run. Here we have calculated based on 12% annual average return.

Step-up SIP will make the path easier

If your initial income is low and you are not able to save Rs 10 or 15 thousand every month, then there is no need to be disappointed. You can choose the option of step-up SIP. Under this, you increase the SIP amount by 5% or 10% every year as your salary or income increases. By doing this, you can easily achieve the financial goal of Rs 1 crore before the stipulated time even by starting with a very small amount (like ₹ 5,000).