Systematic Investment Plans (SIPs) are one of the most popular ways for investors to build wealth steadily over the long term. With disciplined contributions and the power of compounding, even a modest monthly investment can turn into a substantial fund. The big question is—can just ₹5,000 invested every month through SIP actually create a corpus of ₹25 lakh? Let’s break it down with calculations, timelines, and expert tips.
The true strength of SIPs lies in compounding, or “interest on interest.” The longer you stay invested, the faster your money multiplies. Mutual funds, when invested for the long term, can generate an average annual return of 10–15% depending on market conditions.
Let’s assume you are investing ₹5,000 per month through SIP. Here’s how your corpus grows depending on different return scenarios:
At 10% annual return – It will take nearly 20 years to accumulate ₹25 lakh.
At 12% annual return – The target can be achieved in about 17 years.
At 15% annual return – The goal may be reached in as little as 15 years.
Clearly, higher returns and disciplined long-term investing can help achieve the target much faster.
Here’s an example of how the fund grows at 12% annual returns with a fixed SIP of ₹5,000:
| Monthly SIP (₹) | Tenure (Years) | Estimated Return (12%) | Corpus (₹) |
|---|---|---|---|
| 5,000 | 10 | 12% | 11.6 lakh |
| 5,000 | 15 | 12% | 25.1 lakh |
| 5,000 | 20 | 12% | 49.9 lakh |
This shows that by staying invested for 15 years, a ₹25 lakh fund can indeed be created.
If you don’t want to wait 15–20 years, there are two effective strategies:
Increase your SIP amount – Instead of ₹5,000, start with ₹7,000 or ₹10,000 per month.
Use Step-up SIPs – Many mutual funds allow you to increase your SIP annually. For example, if you raise your SIP by 10% every year, you may be able to reach ₹25 lakh in 12–13 years.
Patience is essential – SIPs work best when you remain invested for the long term.
Start early – The earlier you begin, the lesser the burden to reach big financial goals.
Inflation matters – A corpus of ₹25 lakh today may have a much lower value after 15–20 years. Always account for inflation while setting targets.
Choose the right fund – Consult financial experts before investing to pick mutual funds that match your risk profile.
Review annually – Track your portfolio performance and make changes if necessary.
Stay disciplined – Avoid withdrawing money during market fluctuations; SIPs are designed to reduce the impact of volatility.
A ₹5,000 monthly SIP may not look like much, but when combined with discipline, patience, and the power of compounding, it can transform into a fund of ₹25 lakh over time. The key is to remain invested, increase contributions when possible, and align your goals with long-term planning.
Disclaimer: The information provided here is for educational purposes only. Investments in mutual funds are subject to market risks. Always consult a certified financial advisor before making investment decisions.
