Mutual Fund SIP Calculator: Systematic Investment Plan has been gaining popularity among Indian MF investors, as it helps in investing in a disciplined
manner. Investment via SIP is convenient as you can give your bank standing instructions to debit the amount every month. Let’s find out how much a monthly investment of Rs 15,000 can grow in 5, 10 and 20 years. See calculation.
What is systematic investment plan (SIP)?
SIP is a vehicle to invest a fixed amount at regular intervals in a mutual fund scheme periodically, at fixed intervals, say once a month. Simply put, a systematic investment plan is similar to a recurring deposit where you deposit a small /fixed amount every month. The SIP instalment amount could be as little as Rs 500 per month.
What is the role of compounding?
The role of compounding is to grow your investment over time. Compounding means your investment earns returns on returns. When you invest, the returns get added to your original amount, and then you earn returns on this bigger amount. The Power of compounding in the case of mutual fund investments can be one of the most effective ways of wealth creation. Let’s say you invested Rs 100 and the compound interest had you earn Rs 5 on this investment. Now, in the next compounding cycle, the return will be calculated on Rs 105 instead of Rs 100.
SIP calculation conditions
- Monthly investment: Rs 15,000
- Assumed annualised return: 12 per cent
- Investment period: 5,10 and 20 years
How much can Rs 15,000 monthly SIP build in 5 years?
The investment amount in 5 years will be Rs 9,00,000, the capital gains will be Rs 3,37,295, and the estimated total corpus in 5 years will be Rs 12,37,295.
How much can Rs 15,000 monthly SIP build in 10 years?
The investment amount in 10 years will be Rs 18,00,000, the capital gains will be Rs 16,85,086, and the estimated total corpus in 10 years will be Rs 34,85,086.
How much can Rs 15,000 monthly SIP build in 20 years?
The investment amount in 20 years will be Rs 36,00,000, the capital gains will be Rs 1,13,87,219, and the estimated total corpus will be Rs 1,49,87,219.
