₹10,000 vs ₹25,000 SIP: How Long to Reach ₹3.5 Crore Corpus?

Compounding is a fundamental financial principle that allows investments to grow over time by generating returns on both the initial investment and the accumulated gains. Once an investment is made, compounding begins, and each periodic addition further benefits from this effect. 

This process continues even if new investments stop, allowing an existing corpus to grow further, as seen in lump sum investments. In this context let’s take a look at how long it takes to build a ₹3.5 crore corpus with monthly SIPs of ₹10,000 and ₹25,000.

Scenario 1: Investing ₹10,000 Monthly SIP for 10 Years

Stage 1: Investment Phase (First 10 Years)

• Investment Plan: ₹10,000 monthly SIP for 10 years.
• Annualised Return: 12%.
• Total Investment in 10 Years: ₹12,00,000.
• Estimated Capital Gains in 10 Years: ₹11,23,391
• Total Corpus after 10 Years: ₹23,23,391.

Stage 2: Growth Phase (Next 20 Years)

If the investor decides to stop the SIP after 10 years and leave the accumulated corpus untouched for the next 20 years, with an annualised return of 12%. The resulting corpus will be as follows:

• Growth Period Without Additional Investment: 20 years.
• Annualised Return: 12%.
• Estimated Capital Gains in 30 Years: ₹2,00,88,720.
• Final Corpus after 30 Years: ₹2,24,12,111

Scenario 2: ₹25,000 Monthly SIP for 5 Years

Stage 1: Investment Phase (First 5 Years)

• Investment Plan: ₹25,000 monthly SIP for 5 years
• Annualised Return: 12%

• Total Investment in 5 Years: ₹15,00,000
• Estimated Capital Gains in 5 Years: ₹5,62,159
• Corpus after 5 Years: ₹20,62,159

Stage 2: Growth Phase (Next 25 Years)

If the investor decides to leave the accumulated corpus untouched for the next 25 years, with an annualised return of 12%. The resulting corpus will be as follows:

• Growth Period Without Additional Investment: 25 years.
• Annualised Return: 12%.
• Estimated Capital Gains in 30 Years: ₹3,29,94,677.
• Final Corpus after 30 Years: ₹3,50,56,836.

Scenario 3: 10,000 SIP for 30 Years

• Investment Plan: ₹10,000 monthly SIP for 30 years.
• Annualised Return: 12%.
• Total Investment in 30 Years: ₹36,00,000.
• Estimated Capital Gains in 30 Years: ₹3,16,99,138.
• Final Corpus after 30 Years: ₹3,52,99,138.

A longer investment period significantly increases wealth creation due to the power of compounding. Continuing the SIP for 30 years rather than stopping after 10 years results in a much larger corpus.

Note: All calculations in this article have been done using a SIP calculator to estimate the potential corpus based on different investment scenarios.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.