Power of Compounding: In how many years your Rs 7,000 monthly SIP investment will grow to Rs 3 cr corpus?

Power of Compounding: For individuals aiming to build a substantial corpus through disciplined and consistent investments, SIP (Systematic Investment Plan) in mutual funds can be a good option. It is a market-linked investment plan that allows investors to contribute small amounts periodically, rather than making lump-sum investments. Additionally, it allows you to take advantage of the power of compounding, offering the potential for market growth over time.

Let’s take a look at how long it would take to accumulate a retirement corpus of Rs 3 crore with a consistent monthly SIP investment of Rs 7,000, assuming an annual return of 12 per cent.

How many years will it take for your Rs 7,000 monthly SIP investment to grow to Rs 3 crore corpus?

To build a corpus of Rs 3 crore or more, an investor would need to invest for at least 32 years in SIP mutual funds.

Power of Compounding: Calculations for building Rs 3 crore retirement corpus

In 32 years, the investor will contribute a total of Rs 26,88,000. With an estimated annual return of 12 per cent, the capital gain earned would be Rs 2,88,77,079. When you add the principal investment and capital gains, the total corpus after 32 years will be Rs 3,15,65,079.

- Total Investment: Rs 26,88,000  
- Expected Capital Gain: Rs 2,88,77,079  
- Total Corpus Received: Rs 3,15,65,079  

SIP Investment Summary

Key Considerations for SIP Investors

While SIPs offer a structured approach to investing, it’s important to keep in mind that they are market-linked, meaning returns are not guaranteed. The assumed 12% return is an estimate and may fluctuate depending on market conditions. Therefore, it is crucial to regularly review and adjust your investment strategy to stay aligned with your retirement goals.