SIP Calculator: How Much To Invest Monthly Via SIP To Get Rs 2 Crore In 15 Years & Rs 5 Crore In 30?

If you were to ask yourself about your most cherished desire, chances are you would say buying a house, owning your dream car, or perhaps enjoying a memorable vacation with your loved ones at a favourite holiday destination.

All cherished desires, however, require money to fulfil. When you determine the amount required and set a time-frame to achieve it, the desire transforms into a financial goal. Once you have a clear financial goal, the chances of you being able to fulfil it also increases.

Let’s look at how mutual fund systematic investment plans (SIPs) can help you turn your financial goals into reality.

SIPs are a convenient mode of investing in mutual funds. You can start an SIP for every financial goal with different time horizons with as low as Rs 500 per month.

Let’s take three scenarios – Rs 5 lakh for a vacation in three years, Rs 2 crore for house purchase after 15 years, and Rs 5 crore for retirement funds in 30 years and see how mutual fund SIPs can help you achieve your goals.

Goal 1: Rs 5 lakh in 3 years for a vacation

You may consider investing in a debt-oriented hybrid mutual fund as the goal is less than five years away.

Says Satish Prabhu, vice president, head of Content and Products, Franklin Templeton India: “A monthly SIP of Rs 12,000 with a 10 per cent annual increment may help reach the desired goal of accumulating Rs 5 lakh in 3 years, assuming an annualised return of 8 per cent.”

Goal 2: Rs 2 crore in 15 years for buying a house

You need to start a monthly SIP of Rs 25,000 with a 10 per cent annual increment in an equity mutual fund to reach the desired goal of accumulating Rs 2 crore over the next 15 years, assuming annualised returns of 12 per cent.

Goal 3: Rs 5 crore in 30 years for retirement corpus

Since the goal is 30 years away, a monthly SIP of Rs 6,500 with a 10 per cent annual increment in an equity mutual fund could help you meet the required goal of accumulating Rs 5 crore, assuming annualised returns of 12 per cent.

The above illustrations highlight the potential of SIPs in helping you meet your financial goals.

A key feature of SIPs is that it helps you invest consistently without timing the market. 

Says Prabhu: “Delaying your SIPs by even five years could double the required monthly SIP amount to meet your goals. Hence, it is essential to commence your SIPs as early as possible to reach your financial goals and remain consistent with your investments across market cycles.”

Ideally, you should start planning for your financial goals with SIPs as soon as you start earning. The reduced monthly SIP amount needed to meet financial targets can become possible through this approach.

The adage – a stitch in time saves nine – is very apt for starting your SIPs on time, and early.