Secret Formula to Maximise SIP Returns: Know How to Build A ₹86 Lakh Corpus in 15 Years With 10-7-1 Rule

Systematic Investment Plans (SIPs) are a cornerstone for building long-term wealth, especially for salaried individuals. To optimise returns, strategies like the "10-7-1 rule" can help investors in building their desired corpus. Confused? Let’s break it down with a few examples. 

What is the 10-7-1 SIP Rule?

The "10-7-1 rule" offers a strategic framework for SIP investing:

• The '10' (Market Correction): This indicates an expectation of a 10% annual market correction. Historical data shows Indian stock markets have seen such dips in 20 of the last 23 years. Long-term investors continue their SIPs during these downturns, using lower Net Asset Values (NAVs) to buy more units, which enhances long-term returns.
• The '7' (Investment Horizon): This signifies a minimum seven-year investment period. Data suggests that investments held for seven or more years, especially in Large Cap, Flexi Cap, and Nifty 50 index funds, consistently yield positive results.
• The '1' (Annual Step-Up): The final '1' emphasises increasing your SIP amount by at least one unit annually, ideally by 10%. This step-up is crucial for countering inflation and aligning investment growth with your rising income, effectively solidifying your financial future.

Scenario 1: Step-Up SIP 

Suppose you invest ₹10,000 with an annual increment of 10%. Assuming that the expected rate of return is 12%, your investment would look like this after 15 years: 

• Initial Monthly Investment: ₹10,000
• Annual Step-Up: 10%
• Duration: 15 years
• Expected Rate of Return: 12%
• Total Invested Amount: ₹38,12,868
• Estimated Returns: ₹48,71,237
• Total Future Value: ₹86,84,105

Scenario 2: Regular SIP 

Now imagine you opt for a regular SIP. In that case, your portfolio will look like this in 15 years: 

• Monthly Investment: ₹10,000
• Duration: 15 years
• Expected Rate of Return: 12%
• Total Invested Amount: ₹18,00,000
• Estimated Returns: ₹32,45,760
• Total Future Value: ₹50,45,760

How Much Difference Did It Make?

This direct comparison shows that adding an annual 10% step-up can nearly double the final wealth generated over 15 years, significantly boosting your corpus from ₹50.45 lakh to ₹86.84 lakh.

Read more: ITR Filing 2025: How to Pay Zero Tax on ₹15.5 Lakh Annual Income. 

Conclusion

The "10-7-1 rule," particularly its emphasis on annually stepping up your SIP contributions, proves to be a powerful strategy for long-term wealth creation. By combining disciplined investing through market cycles with incremental increases aligned to your income and inflation, you can unlock the full potential of compounding and achieve substantially larger 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.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.