Power of Compounding: How much money do you need to invest in monthly SIP to accumulate Rs 8 crore retirement corpus if you start at age 25? See calculations with examples

Capital markets regulator Sebi Chief Madhabi Puri Buch on Monday (September 2) said soon investors will be able to start SIP with as low as Rs 250 per month. 

Currently, the minimum investment amount is Rs 500 per month.

There is no maximum limit to invest in an SIP.

SEBI requires mutual funds to offer a minimum investment value of Rs 100 for lump-sum investments.

SIPs can let your money grow tremendously over time due to compounding interest. 

Top-up SIP
Flexible SIP
Perpetual SIP 

It can be daily, weekly, monthly, or yearly. 

A SIP calculator can help you define financial objectives, determine the amount you need to contribute, and track your progress.

- Investment goals
- Scheme performance
- Risk appetite
- Expenses

It enables the individual to acquire a larger corpus over time owing to the power of compounding. This strategy also promotes disciplined investment because a certain amount is invested at regular periods. Furthermore, it can assist reduce the impact of market volatility by purchasing more units when prices are low and fewer units when prices are high. This method, known as rupee cost averaging, can be successful in the long run. 

If you want to see the power of compounding interest, start investing as early as possible. But don't worry if you have started late, you can still accumulate a large corpus through a monthly SIP.

If you start investing at 25-year age, then you have 30 years to invest till retirement. 

Here's how to make corpus of Rs 8 crore at retirement:

Monthly SIP: Rs 12,320
Annual return: 12%
Duration: 35 years
Total investment in 30 years: Rs 51,74,400
Maturity amount: 8,00,21,715

Disclaimer: Investing in mutual funds is subject to market risks. Consult your advisor before making any investment.