Home / Money / Personal Finance /  Mutual fund calculator: Monthly SIP you need to accumulate 5.5 crore in 20 years
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Mutual fund calculator: Aniket is a 40 year old professional and his monthly take home salary is around 90,000. He is currently paying around 25,000 on home loan EMI and around 5,000 for his 7 years old daughter's monthly school fee. He is investing around 10,000 per month that aims to accumulate money for his daughter's higher studies and marriage. Now, Aniket is looking forward to invest in mutual funds that can help him generate around 5.50 crore at the time of his retirement i.e. in 20 years.

On whether Aniket's investment goal is economically viable; Pankaj Mathpal, Founder & MD at Optima Money Managers said, "The investor has 50,000 in hand as his 40,000 monthly ( 25,000 home loan, 5,000 daughter’s school fee and 10,000 for daughter’s future) income goes in home loan EMI repayment, child school fee and their future planning. Since, the time horizon is 20 years and the investment goal is ambitious 5.5 crore, the investment tool has to be equity mutual funds. The investor needs to remember 15 X 15 X 15 rule of mutual funds where one can become a crorepati by following this mutual fund SIP rule."

Pankaj Mathpal said that in this 15 X 15 X 15 rule of mutual funds, one can expect to get 15 per cent mutual fund return after investing for 15 years. However, if the investment amount is 15,000 per month, one can accumulate 1 crore after 15 years. However, in Aniket's case, the time horizon is 20 years. So, the investor can make a pun in this SIP rule changing it to 20 X 15 X 15 rule of mutual funds. However, even after doing this, the maturity amount will go around 2 crore only, indicates SIP calculator.

Advising SIP step-up plan; Amit Gupta, MD at SAG Infotech said, "One should increase monthly SIP amount with increase in one's income. As investor has a time horizon of 20 years and in these 20 years, normal 15,000 monthly SIP won't be enough to achieve 5.5 crore investment goal. The investor should use 15 per cent annual step up. If he does that for next 20 years, then in that case, if the investor starts a mutual fund SIP investing 15,000 per month today, he will be able to accumulate around 5.55 crore after 20 years."

Source: piggy SIP calculator
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Source: piggy SIP calculator

Asked about the mutual fund SIP plans that may help an investor get around 15 per cent annual return, Pankaj Mathpal of Optima Money listed out the following SIP plans:

1] Nippon India Flexi Cap Fund;

2] Aditya Birla Sun Life Equity Advantage fund;

3] ICICI Prudential MNC Fund; and

4] Canara Robeco Flexi cap.

Disclaimer: The views and recommendations made above are those of individual analysts or personal finance companies, and not of Mint.

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