SIP Calculation: How a Rs 10,000 monthly investment can grow to Rs 6 crore by THIS age - Explainer - Mutual Funds | Latest News Updates

SIP Calculation. (Image: AI)

Highlights

Starting a SIP early can lead to wealth creation of several crores by age 60.
Investing Rs 10,000 monthly at 12% return can grow to Rs 6.4 crore in 35 years.
Delaying SIP by 10 years can cut total wealth by Rs 4.5 crore, highlighting power of compounding.

SIP Calculation: Starting a Systematic Investment Plan (SIP) early can develop long-term wealth creation. According to research by FundsIndia, a simple example shows that investing Rs 10,000 every month at an assumed return of 12 per cent annually can grow into several crores by the time an investor turns 60. Additionally, the research also shows that the biggest advantage comes from the power of compounding and the longer time horizon available to early investors.

The earlier an investor begins a SIP, the more time money gets to compound. According to the FundsIndia research, someone who starts investing at age 25 can accumulate around Rs 6.4 crore by age 60 with a monthly SIP of Rs 10,000 and an assumed 12 per cent annual return.

However, delaying the investment dramatically reduces the final corpus. Even a delay of five to ten years can cut the total wealth by several crores.

Here is a detailed calculation: Rs 10,000 SIP at 12 per cent return

Starting Age	Investment Duration	Total Investment	Value at 60
25	35 years	Rs 42 lakh	Rs 6.4 crore
30	30 years	Rs 36 lakh	Rs 3.5 crore
35	25 years	Rs 30 lakh	Rs 1.9 crore
40	20 years	Rs 24 lakh	Rs 99 lakh
45	15 years	Rs 18 lakh	Rs 50 lakh
50	10 years	Rs 12 lakh	Rs 23 lakh
55	5 years	Rs 6 lakh	Rs 8 lakh

Example calculation – Starting at age 25

Monthly SIP: Rs 10,000
Annual return: 12 per cent
Investment Period: 35 years

Total amount invested:

Rs 10,000 × 12 months × 35 years = Rs 42,00,000

Estimated value at age 60:

This means the investor earns nearly Rs 5.98 crore as returns, showing the massive impact of compounding.

What happens if you delay by 10 Years?

If the same investor waits until age 35 to start:

Total investment: Rs 30 lakh
Final value at 60: Rs 1.9 crore

This is Rs 4.5 crore less compared to starting at age 25.

Even though the investment amount decreases only slightly, the loss in compounding time drastically reduces wealth creation.

Why compounding makes the difference?

Compounding allows investment returns to generate further returns over time. When investments stay in the market longer, the growth curve becomes exponential.

For example:

First 10–15 years generate relatively smaller gains.
The last 10–15 years contribute the largest portion of the final corpus.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)

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