SIP | SIP Calculator | target 1 crore | how to make 1 crore
Reaching ₹1 crore may sound like a huge goal, especially if you’re starting small. But with consistent investing and the power of compounding, even an SIP (Systematic Investment Plan) of just ₹5,000 per month can get you there.
SIP Calculator: 1 Crore with an SIP of ₹5,000 per Month
Every one has a dream of having 1 crore. It is easily possible with consistent investment. Before going forward lets understand first what is SIP:
What is an SIP?
A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly (monthly, weekly, etc.) into a mutual fund. It’s like a recurring deposit, but for market-linked investments.
SIPs help you build wealth slowly and steadily, without worrying about timing the market. It also encourage disciplined investing.
The Power of Compounding
Albert Einstein once called compound interest the “eighth wonder of the world.” That’s because money earns returns, and those returns then earn more returns – like a snowball that keeps growing.
In SIPs, compounding works in your favor as your monthly investments and returns keep growing over time.
How Long Will It Take to Reach ₹1 Crore with ₹5,000 SIP?
Let’s assume:
- You invest ₹5,000 every month (i.e., ₹60,000 per year)
- You get an average annual return of 12% (typical for equity mutual funds over the long term)
| Time (Years) | Total Invested | Approx. Wealth Created |
|---|---|---|
| 10 years | ₹6,00,000 | ₹11.6 lakh |
| 15 years | ₹9,00,000 | ₹20.6 lakh |
| 20 years | ₹12,00,000 | ₹49.9 lakh |
| 25 years | ₹15,00,000 | ₹1 crore+ |
So, you can create ₹1 crore in about 25 years with just ₹5,000 per month, assuming 12% annual returns.
Want to Reach ₹1 Crore Faster?
You can reach ₹1 crore quicker by either:
- Increasing the SIP amount over time (say, by 10% every year)
- Investing in high-growth mutual funds, though they come with more risk
- Investing lump sums when you get bonuses or windfalls
- Starting early, which gives compounding more time to work
Let’s say you increase your SIP by just 10% every year:
- ₹5,000 in year 1, ₹5,500 in year 2, ₹6,050 in year 3… and so on
- You can reach ₹1 crore in about 20–21 years instead of 25
Things to Keep in Mind
- Stay Consistent: Don’t stop your SIP when markets go down. That’s actually when you buy more units at lower prices.
- Choose the Right Fund: Equity mutual funds generally give higher returns in the long run. Consider diversified equity or index funds with good track records.
- Review Once a Year: Make sure your fund is performing in line with expectations. If not, switch to a better one.
- Tax Efficiency: Equity mutual funds are tax-friendly if held for over a year. Long-term capital gains up to ₹1 lakh per year are tax-free.
Conclusion
Creating ₹1 crore isn’t about luck — it’s about patience, discipline, and smart investing. With just ₹5,000 a month and enough time, your dream of becoming a crorepati is achievable.
The earlier you start, the faster you’ll get there.
“Don’t wait to invest. Invest and wait.”
FAQ
Q. How long will it take to reach ₹1 crore with a ₹5,000 monthly SIP?
A. At an assumed annual return of 12%, it will take approximately 21 years to accumulate ₹1 crore.
Q. Is ₹1 crore realistic with just ₹5,000 per month investment?
A. Yes, with discipline, time, and consistent returns, ₹1 crore is an achievable goal through SIPs.
Q. What kind of returns are assumed to reach ₹1 crore with ₹5,000 SIP?
A. The calculation usually assumes 10–12% annual returns, typically delivered by equity mutual funds over the long term.
Q. Which type of mutual fund is best for a ₹5,000 SIP aiming for ₹1 crore?
A. Equity mutual funds, especially diversified or index funds, are ideal for long-term wealth creation.
Q. Can increasing my SIP amount help me reach ₹1 crore faster?
A. Absolutely. A step-up SIP where you increase your SIP amount annually will help you reach ₹1 crore sooner.
Q. Are SIPs safe for long-term wealth creation?
A. SIPs in equity mutual funds carry market risk but tend to be less volatile and more rewarding over the long term.
Q. What happens if I miss a SIP installment?
A. Missing one or two SIPs won’t hurt long-term goals, but consistent investing is key. Some platforms even allow skipping one month without penalty.
Q. Do I need a Demat account to start a SIP?
A. No, a Demat account is not required. You can start SIPs through mutual fund platforms or apps.
Q. Is SIP better than fixed deposit (FD) for long-term goals like ₹1 crore?
A. Yes, SIPs in equity funds generally offer much higher returns than FDs, especially over 15–20 years.
Q. How do I start a ₹5,000 SIP today?
A. You can start by selecting a mutual fund through an AMC website or a platform like Zerodha, Groww, or Paytm Money, completing KYC, and setting up auto-debit for your SIP.
Disclaimer:
This article is for informational purposes only and does not constitute financial, investment, or legal advice. Readers are encouraged to do their own research and consult a qualified financial advisor before making any investment decisions.