SIP Calculator: Mutual fund SIPs are regarded as a fantastic option for long-term investing. They offer investors significant long-term returns. However, there are two key conditions: first, you need to stay invested for an extended period. Second, you must exercise discipline in your investments. This means you should never halt your SIP halfway through. Today, we will discover how long it will take to build a corpus of Rs 10 lakh if you invest Rs 5,000 in an SIP.

How can a Rs 5,000 SIP generate a Rs 10 lakh fund?

Let’s delve into how you can accumulate a Rs 10 lakh fund by saving just Rs 5,000 through SIP investments. SIP returns are variable. Based on the average returns over the past 10-15 years, SIPs have yielded returns of up to 12% for investors. Here, we will evaluate these returns using three different return models.

Invest for 11 years and 10 months at an 8% return.

Imagine you earn an 8% return. You would contribute Rs 5,000 every month and maintain a regular SIP for 11 years and 10 months, resulting in a corpus of Rs 10 lakh. Invest for 10 years and three months at a 10% return. If you achieve a 10% return, you would deposit Rs 5,000 monthly and continue with regular SIPs for 10 years and three months. This would grow your corpus to Rs 10 lakh. Invest for 9 years and 1 month at a 12% return. If you earn a 12% return, you would invest Rs 5,000 every month and keep up with regular SIPs for 9 years and 1 month. This would also increase your corpus to Rs 10 lakh.

Stop SIP when the stock market is falling

The stock market fluctuates constantly. Many people stop their SIPs during a downturn to avoid losses. This is completely wrong. Stock declines are crucial for SIPs. Maximum investment should be made during this time so that you can profit when the market rises. A decline in the stock market can help you purchase more mutual fund units.