Monthly SIP of ₹5,000 vs ₹10,000: Which Works Better to Reach ₹1 Crore?

A Systematic Investment Plan (SIP) is one of the most efficient ways for individuals to build long-term wealth through disciplined investing. By contributing a fixed amount regularly, investors can take advantage of rupee cost averaging and the power of compounding. 

However, one of the most common questions investors have is, should I invest ₹5,000 or ₹10,000 per month if my goal is to accumulate ₹1 crore?

A SIP calculator can help estimate how much time each option will take, based on your expected rate of return and investment duration.

How Long Will It Take to Reach ₹1 Crore?

Assuming an average annual return of 12%, let’s compare both SIP amounts using a SIP calculator:

₹5,000 per month SIP 

At 12% annual returns, it would take around 26 years to build a corpus of ₹1 crore. Over this period, you would have invested ₹16 lakh and earned nearly ₹91 lakh in returns.

₹10,000 per month SIP

At the same assumed return rate of 12%, if you continue a ₹10,000 per month SIP for 26 years, the corpus could potentially double to ₹2 crore. Over this period, your total invested amount would be around ₹31 lakh, while the estimated returns could exceed ₹1.8 crore, highlighting the immense power of long-term compounding and consistent investing.

However, sticking to our target of 1 crore, with the same return rate, you can reach ₹1 crore in just 21 years. Here, your total investment would be over ₹25 lakh, with the remaining ₹88 lakh generated through compounding.

Clearly, doubling your SIP not only accelerates wealth creation but also reduces the time required to achieve your financial goal by about 5 years.

Factors to Consider

While a higher SIP helps achieve the goal faster, it’s essential to ensure financial stability before committing to a larger amount. Investors can also adopt a step-up SIP strategy, where the investment amount increases annually with income growth, making the target achievable without financial strain.

Additionally, factors like market volatility, fund selection, and inflation should be considered. Equity mutual funds are ideal for long-term SIPs, as they have the potential to deliver inflation-beating returns over time.

Also Read: SIP for Down Payment vs Full Property Purchase – Which Goal Works Better?

Conclusion

Both ₹5,000 and ₹10,000 SIPs can help you reach ₹1 crore, but the time frame differs significantly. Using a SIP calculator helps you plan effectively, visualise growth, and choose the investment amount that best aligns with your financial goals.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal 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.