SIP is a simple and convenient way to invest in mutual funds. With standing instructions to your bank, a fixed amount is automatically debited every month, saving you the trouble of writing a cheque each time. SIPs are popular among Indian investors because they help average out the cost of investments and encourage regular investing. This approach reduces worries about market ups and downs or trying to time the market.

Monthly systematic investment plans (SIPs) have surpassed the Rs 26,000-crore mark for the first time in December, reflecting the continued interest of small investors in mutual funds for long-term investments, according to data released by the Association of Mutual Funds in India (AMFI) on Thursday. SIP contributions for December 2024 stood at Rs 26,459 crore, up from Rs 25,320 crore in November 2024.

Additionally, mutual fund (MF) folios rose to 22.50 crore in December, compared to 22.02 crore in the previous month.

Month-wise SIP contributions in December 2024 increased by an impressive 50% year-on-year, despite some geopolitical conditions challenging the equity markets globally.

Here, we will check through calculations how many years it would take for an investor to build a corpus of Rs 1 crore by investing Rs 1,000, Rs 2,000, Rs 3,000, and Rs 5,000 per month. This calculation assumes an annualised return of 12% and a 10% increase in the SIP amount every year.

Also read: MFs close 2024 with record Rs 3.9L-crore inflows

How long does it take to build a Rs 1-crore corpus with Rs 1,000, Rs 2,000, Rs 3,000 and Rs 5,000 SIPs?

SIP of Rs 1,000 with a 10% step-up each year

If you invest Rs 1,000 per month with a 10% annual step-up and expect an average return of 12% per year, you can accumulate approximately Rs 1.02 crore in 31 years.

Out of this, your total investment will be around Rs 21.83 lakh, and the remaining Rs 79.95 lakh will come from returns. Total corpus after 31 years comes to Rs 1.02 crore. The calculation is done assuming 12% annualised return on monthly SIP investment, which can be considered as a moderate return considering the performance of most funds in the equity space in the last 10-15 years.

SIP of Rs 2,000 with a 10% step-up each year

If you raise your monthly SIP to Rs 2,000 with the same 10% annual step-up, you can achieve a corpus of Rs 1.15 crore in 27 years at 12% annualised returns. The total investment will amount to Rs 29.06 lakh, while returns will contribute Rs 85.69 lakh to your corpus.

SIP of Rs 3,000 with a 10% step-up each year

A monthly SIP of Rs 3,000, increasing by 10% annually, at 12% annualised returns will see you accumulate Rs 1.10 crore in 24 years. Over this period, your total investment will be Rs 31.86 lakh, and returns will add Rs 78.61 lakh.

SIP of Rs 5,000 with a 10% step-up each year

If you increase this monthly SIP to Rs 5,000 and step it up 10% every year expecting 12% annualised returns, you will be able to reach a corpus of Rs 1.16 crore in just 21 years. The total investment will be Rs 38.40 lakh, with Rs 77.96 lakh earned as returns.

Also read: SIPs surpass fixed deposits, equities as India’s preferred investment choice

Conclusion:

If you start with Rs 1,000 SIP and increase the investment by 10%, it will take you 31 years to be a crorepati. An SIP of Rs 2,000 with 10% increase in investment each year will quicken the pace of your crorepati goal by 4 years, since you achieve your target in 27 years. If the SIP investment is increased to Rs 3,000, with the step-up amount and return expectations remaining the same, you can make Rs 1 crore in 24 years. Finally, if this SIP amount is increased to Rs 5,000, you can be a crorepati in just 21 years, assuming 12% returns on investment annually and a step-up of 10% each year.

Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.