How much SIP is needed to create a corpus of Rs 5 crore in 20 years?

How much SIP is needed to create a corpus of ₹5 Cr in 20 years? | Mint  #AskBetterQuestions

SIP (systematic investment plan) is a popular investment route that allows retail investors to invest in mutual fund schemes regularly over a specific period. It is widely recognised as a disciplined and convenient approach to wealth creation, especially for retail mutual fund investors. Discussed here are crucial SIP benefits and stepwise measures to create a corpus of Rs 5 crore in 20 years through the SIP mode.

SIP benefits

There are several SIP benefits that make this mode an attractive investment method. Here are some key reasons why investors opt for SIP –

Disciplined investing

SIP promotes a disciplined approach to investing. By committing to invest a fixed amount regularly, investors cultivate a habit of saving and investing consistently, irrespective of the market conditions. This helps in avoiding impulsive investment decisions driven by short-term market fluctuations.

Rupee cost averaging

SIP allows investors to benefit from rupee cost averaging feature. By investing a fixed amount regularly, investors can purchase more units when prices are low and fewer units when prices are high. This strategy helps to average out the cost per unit over time, potentially reducing the impact of market volatility.

Long-term wealth creation

SIP is designed for long-term wealth creation. By investing regularly over a significant period, investors can benefit from the power of compounding. The returns generated from earlier investments are reinvested, allowing for potential exponential growth of the investment corpus over time.


SIP offers flexibility to investors in terms of investment amounts and frequencies. Investors can start with a minimum investment amount, typically as low as Rs 500, and choose their preferred frequency, such as monthly, quarterly, or even weekly investments. This flexibility makes SIP accessible to a wide range of investors with varying financial capacities.

Stepwise measures to create a corpus of Rs 5 crore in 20 years through SIP mode

Here’s a stepwise approach for new retail investors to create a corpus of Rs 5 crore in 20 years through SIP –

Set a clear financial goal

Define your financial objective, in this case, accumulating a corpus of Rs 5 crore in 20 years. Having a specific goal helps in determining the required investment amount and selecting suitable mutual funds.

Compute the required monthly investment

To determine the monthly investment required, consider the expected rate of return and the time horizon. Assuming an average annual return of 12% (which is a reasonable long-term expectation from equity-linked mutual funds), you can use an online SIP calculator to calculate the monthly investment amount. Based on this calculation, you may need to invest around Rs 50,500 per month to achieve your corpus goal of Rs 5 crore in 20 years.

Select a suitable mutual fund scheme

Choose a mutual fund scheme that align with your investment objectives, risk appetite, and time horizon. Consider a mix of equity mutual funds for potentially higher returns and debt funds for stability. It is advisable to consult with a financial advisor or conduct thorough research before finalising the mutual fund scheme.

Start investing regularly

Open a mutual fund account with a reputed fund house and start investing the calculated monthly amount through the SIP mode. Ensure you have a consistent investment discipline, regardless of market conditions. Automate your investments by setting up a standing instruction or using online platforms for ease and convenience.

Review periodically

Periodically review the performance of your mutual fund scheme and adjust, if necessary. Stay informed about market trends but avoid making impulsive investment decisions based on short-term fluctuations. Remain invested for the long term to benefit from the compounding effect.


SIP is a powerful investment tool for retail investors. By following a disciplined approach and investing regularly over a long period, investors can potentially create a substantial corpus. With its benefits of rupee cost averaging, disciplined investing, flexibility, and long-term wealth creation, SIP provides a structured and efficient way to achieve financial goals. By implementing the stepwise measures outlined above, new retail investors can work towards creating a corpus of Rs 5 crore in 20 years through SIP. Remember to consult with a financial advisor for customised guidance and to ensure your investment strategy aligns with your risk tolerance level and financial objectives.

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