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Business News/ Money / Personal Finance/  How much SIP is required to accumulate a corpus of 1 Cr in 10, 15 and 20 years?
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How much SIP is required to accumulate a corpus of ₹1 Cr in 10, 15 and 20 years?

A mutual fund is a particular kind of investment vehicle where the fund is run by a professional investment manager who gathers money from investors and allocates it towards stocks, bonds, or other securities to generate capital appreciation to create wealth.

Diversification and the SIP option, which allow investors to build long-term wealth, are two of the major advantages of investing in mutual funds. (istockphoto)Premium
Diversification and the SIP option, which allow investors to build long-term wealth, are two of the major advantages of investing in mutual funds. (istockphoto)

A mutual fund is a particular kind of investment vehicle where the fund is run by a professional investment manager who gathers money from investors and allocates it towards stocks, bonds, or other securities to generate capital appreciation to create wealth. Diversification and the SIP option, which allow investors to build long-term wealth, are two of the major advantages of investing in mutual funds. Before investing in a mutual fund, carefully read the brochure and take into account your investment objectives, risk tolerance, and time horizon. Let's get views from our various industry experts on how much SIP is needed to accumulate a corpus of 1 Cr in a long-term bet of 10, 15, and 20 years.

Gautam Kalia, SVP and Head Super Investor at Sharekhan by BNP Paribas

It is always good to start investment in early stage of life as this helps to create good corpus with lesser investment amount. Investors should start SIP as per below table to create Rs.1Crs corpus.

Goal AmountSIP required for investment tenure of 10 Year, return assume at 12%paSIP required for investment tenure of 15 Year, return assume at 12%paSIP required for investment tenure of 20 Year, return assume at 12%pa
10,000,00043,47120,01710,109

CA Manish P. Hingar Founder at Fintoo

To amass a corpus of 1 crore in 10, 15, and 20 years via mutual fund SIPs, the monthly SIP amounts required are as follows for investors with a moderate risk appetite: 40,040, 19,819, and 10,009, respectively. These amounts are based on an assumed Compound Annual Growth Rate (CAGR) of 12%.

For investors with a conservative risk profile, the required monthly SIP amounts for the same tenures are 48,414, 23,928, and 13,060, respectively. These figures are based on an assumed CAGR of 10%.

Investors with an aggressive risk profile, on the other hand, will need to invest 35,886, 14,774, and 6,597, respectively, per month for the given tenures, assuming a CAGR of 15% in order to achieve the desired corpus.

As we know higher risk means higher returns and thus different return rates are assumed for different risk profiles as it is suggested that investors select the type of mutual funds based on their risk profile.

Abhay Talekar, Co founder & CFO, uKnowva HRMS

The required SIP amount to accumulate a corpus of 1 crore in 10, 15, and 20 years will depend on the expected rate of return from the investment. Assuming an average annual rate of return of 12%, the following table shows the required monthly SIP amount to reach the 1 crore target for each investment period:

Investment periodRequired monthly SIP assuming 12% return per annum
10 years 43,000
15 years 19,000
20 years 9,000

Note that the required SIP amount will increase if the expected rate of return is lower than 12%. Additionally, the above figures are for indicative purposes only, and actual results may differ based on market conditions and the performance of the chosen investment instrument. It is advisable to consult with a financial advisor before making any investment decisions.

Satyen Kothari, the founder and CEO of Cube Wealth

While returns vary based on many factors an estimated 44,000/month SIP over a 10-year period should give you between 1 Cr assuming 12% returns.

20,000/month SIP over a 15-year period should give you between 1 Cr assuming 12% returns

11,000/month SIP over a 20-year period should give you between 1 Cr assuming 12% returns

Disclaimer: The inputs are based on an assumption of 12% which is not guaranteed

Himani Chaudhary, finance creator

The amount of money needed to accumulate a corpus of 1 crore in 10, 15, or 20 years will vary based on several factors such as the rate of return, time horizon, and investment amount. To accumulate a corpus of 1 crore in just 10 years, investors will need to put in a larger amount since they have less time on their side. In this case, a monthly investment of 48,000 is required. 

However, by increasing the investment horizon by just 5 years to 15 years, the required monthly investment drops to 23,000, and it further reduces to 13,000 for a 20-year horizon. Power of compounding works best over the long term, and investors must give themselves enough time to let their investments grow. The longer the investment horizon, the lesser the monthly investment required to accumulate the corpus. Furthermore, to achieve a long-term return of 10%, investors can consider investing in a combination of investment options such as EPF, PPF, Equity Growth Mutual Funds, Debt Mutual Funds, or Fixed Deposits. It is also important to note that returns from debt instruments such as FDs , Debt Mutual Funds are currently around 8%, while equity mutual funds have delivered an average return of 12% over the long term. Investors must also consider their risk appetite while investing and choose investment options accordingly.

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ABOUT THE AUTHOR
Vipul Das
Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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Published: 28 Mar 2023, 10:48 PM IST
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