How ₹2,000 per Month Can Grow into ₹5 Lakh Through SIP?

A Systematic Investment Plan (SIP) allows investors to build corpus gradually by investing a fixed amount every month. Even a modest contribution, when invested consistently over time, can grow into a sizeable corpus due to the power of compounding. The following examples explain how small monthly SIPs can help investors reach meaningful financial milestones.

Example 1: ₹2,000 SIP Growing into ₹5 Lakh

Consider an investor who starts a SIP of ₹2,000 per month and continues it for 12 years with an expected annual return of 12%. 

Over this period, the investor contributes a total of ₹2,88,000. Due to compounding, the investment grows steadily and reaches over a value of ₹6,00,000 at the end of the 12-year tenure. 

The estimated returns in this case are around ₹3,56,000, which is more than the amount invested, highlighting how time plays a crucial role in wealth creation.

Example 2: Higher Duration with the Same Monthly Investment

In another scenario, if the same ₹2,000 monthly SIP is continued for 15 years at an expected return of 12% per annum, the total invested amount rises to ₹3,60,000. 

The total investment value at the end of 15 years increases to ₹10,00,000. The estimated returns of nearly ₹6,49,152 exceed the invested amount, showing how extending the investment duration significantly boosts returns without increasing the monthly contribution.

Example 3: Increasing SIP Amount for Faster Growth

Now consider an investor who increases the SIP amount to ₹3,000 per month and invests for 12 years at an expected return of 12%. The total invested amount in this case is ₹4,32,000. 

At the end of the investment period, the corpus grows to around ₹9,60,000, generating estimated returns of about ₹5,34,757. This example shows how even a small increase in monthly SIP can accelerate wealth accumulation.

Why SIP Works for Long-Term Investors?

SIP investing works best when investors remain disciplined and stay invested for longer durations. Regular investments help average market volatility, while compounding ensures that returns themselves generate further returns over time.

Also Read: Planning a ₹2 Crore Corpus Through SIP!

Conclusion

These examples clearly show that small, disciplined SIP investments can lead to meaningful wealth creation over time. Using an SIP calculator helps investors estimate future corpus values, compare different investment durations or amounts, and plan financial goals more effectively. By adjusting monthly contributions, tenure, and expected returns in an SIP calculator, investors can design a strategy that best suits their long-term financial objectives.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.