Unveiling the Power of Rs 10,000 Monthly SIP: How to accumulate Rs 1 crore with compounding (2024)

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Unveiling the Power of Rs 10,000 Monthly SIP: How to accumulate Rs 1 crore with compounding? ›

The 8-4-3 rule of compounding can be your way to achieve the Rs 1 crore corpus goal. Jiral Mehta, Senior Research Analyst, FundsIndia said that in this strategy, if you invest Rs 10,000 every month, assuming annual returns of 12 per cent, it takes 8 years to reach the Rs 16 lakh maturity amount.

The rule says to achieve the goal of earning Rs 1 crore, an investor should invest Rs 15,000 monthly through SIP for 15 years, considering a 15% annual return from an equity fund. Consistent adherence to this strategy can lead to significant wealth accumulation.

In 26 years, you can accumulate a Rs 1 crore corpus if you begin investing Rs 5,000 per month in mutual fund SIP. Here the interest rate, let's assume, remains constant at 12 per cent per annum.

Investing a monthly SIP investment of Rs 63,000 for the next 8 years could potentially build a corpus of around Rs 1 crore, assuming an average annual return of 12%.

The formula for compounding in SIP involves calculating future value using the formula: FV = P [(1 + r/n)^(nt)], where FV is the future value, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years.

There are eight large cap mutual funds which have delivered over 40 percent return in the past one year. These include Quant Large Cap Fund, Bank of India Bluechip Fund, JM Large Cap Fund and Nippon India Large Cap Fund, among others.

Summary. Learn about the 8-4-3 rule of compounding, where investments double within 8, 4, and 3 years, showcasing exponential growth. It emphasizes staying dedicated to investment plans, guarding against inflation, and adapting to market changes.

Meaning of the 15-15-15 rule in Mutual Funds

The Investment: You should invest Rs 15,000 per month. The Tenure: The total of your investment should be 15 years. It means that you will invest Rs 15,000 every month for the next 15 years. The Return: Your expected returns on your investment should be 15%

As you know there are no fixed returns in mutual funds but you can expect around 8% - 10% in Debt hybrid funds, around 10% - 12% in equity hybrid funds and 12%-15% in equity funds if you have a long-term horizon.

How to get 50 lakhs in 5 years with SIP? ›

For example, if an individual plan to accumulate ₹50 lakhs over the tenure of 5 years, assuming the individual invests in a Flexicap fund or a Multicap fund which is giving an annualized return of 15%, then the individual needs to invest ₹55,750 per month for 5 years in order to generate the required corpus.

On the other hand, a monthly contribution of Rs 26,000 in debt funds, assuming a pre-tax return of 7 per cent, would create a corpus of about 19 lakh in 5 years. Thus, a combined monthly contribution of Rs 1.30 lakh would create a corpus of over Rs 1 crore in 5 years.

Means, if an investor decides to take an SBI Mutual Funds SIP with Rs 1,500 per month for 30 years, he or she would get Rs 1,05,14,730.915 as maturity amount after 30 years, means one can become a crorepati by doing Rs 1,500 per month SIP for 30 years in SBI Mutual Funds SIP.

If you want to get Rs 1 crore in 20 years, your SIP investment per month will be Rs 10,009. The total investment will be Rs 24.02 lakh, while you will get capital gains of Rs 75.98 lakh on it. So, the total return in 20 years will be Rs. 1 crore.

With a SIP amount of Rs 50,000 with 0% annual increase, the investor will be able to reach Rs 1 crore in 9 years and 2 months. With a SIP amount of Rs 75,000 with 0% annual increase the investor will be able to reach Rs 1 crore in 7 years and 1 month.

SIP investments provide a safe and effective way to build wealth, save taxes, and achieve long-term financial goals. Remember, the key lies in making informed decisions and staying consistent with your strategy.

If you invest ₹30,000 per month in a Systematic Investment Plan (SIP) for a period of 5 years, assuming an average annual return of 12% on your SIP investment, using the SIP calculator, your returns will be: Your invested amount will be: ₹18,00,000. Estimated Returns will be will be: ₹6,74,591.

The three toppers in the list were from one fund house - Quant Mutual Fund. Quant Small Cap Fund, Quant Mid Cap Fund, and Quant ELSS Tax Saver Fund gave 37.30%, 31.84%, and 30.37% returns, respectively on SIP investments in the last seven years.

Mutual Fund SIP calculator shows a regular monthly SIP of ₹10,000 in Nippon India Small Cap Fund in ten years could have made investors millionaires. It has given 25.96 % annualised returns in ten years. The calculator shows that a monthly SIP of ₹10,000 in this fund could have grown to approx. ₹57,53,702 in ten years.

What if I invest $10,000 in SIP for 5 years? ›

Here is a fund which has delivered superior returns over a five year period outperforming the index it is benchmarked against. An investment of Rs 10,000 per month via systematic investment plan (SIP) route over a period of five years in Quant Small Cap Fund's growth is worth nearly Rs 19 lakh today.

How much is Rs. 5,000 for 5 years in SIP? If you invest Rs. 5,000 per month through SIP for 5 years, assuming 12% return. The estimate total returns will be Rs. 1,12,432 and the estimate future value of your investment will be Rs. 4,12,431.

If you invest Rs.10000 per month through SIP for 30 years at an annual expected rate of return of 11%, then you will receive Rs.2,83,02,278 at maturity.