₹15,000 a Month SIP: What It Could Build in 10, 15 and 20 Years

If you had started a ₹15,000 monthly SIP in a equity mutual fund scheme tracking the Nifty 50 benchmark, your investment could have potentially grown to approximately ₹32 lakhs* in 15 years, ₹68 lakh* in 20 years, or ₹1.25 crore* in 25 years, assuming an annual return of 11%. 

*These figures are only illustrative estimates.

A ₹15,000 monthly SIP may look like a modest line item in a monthly budget. But over time, it could potentially grow into a considerable corpus through the power of compounding. 

To illustrate how investment duration and compounding may influence the potential value of an SIP investment, this article simulates and shows how much a ₹15,000 per month SIP could potentially grow to over 10, 15, and 20 years, assuming annual returns of 8%, 9%, 10%, and 11%.

But first, let’s understand what compounding means and how it may potentially contribute to the growth of an SIP investment over time.

“Compounding” is a term used to represent “return on return”. When an investor makes regular SIP contributions to a mutual fund scheme, each instalment purchases units at the applicable NAV. As the market value of the scheme’s investments changes, the NAV may rise or fall, and influence the value of the accumulated units.

Now, if the investment generates “positive returns”, its value may increase. Subsequent returns can then apply to this higher accumulated value, rather than only to the original amount invested. Over a longer investment period, this process can contribute to a larger potential corpus.

However, note that in mutual funds, compounding does not mean that a fixed interest amount is added to the account every month. Mutual fund returns fluctuate with market performance and are not pre-determined and not guaranteed or assured.

Suppose you had started a ₹15,000 monthly SIP in a equity mutual fund scheme tracking the Nifty 50 benchmark for 10 years. Over this period, the total amount invested would have been ₹18,00,000 (₹15,000 per month x 12 months x 10 years). 

Depending on the assumed annual rate of return, the investment could have potentially grown to the following amounts:

Suppose you had started a ₹15,000 SIP in a equity mutual fund scheme tracking the Nifty 50 benchmark for 15 years. Over this period, the total amount invested would have been ₹27,00,000 (₹15,000 per month x 12 months x 15 years). 

Now, again assuming the annual rates of return as 8%, 9%, 10%, and 11%, this investment could have potentially grown to the following amounts:

Suppose you had invested ₹15,000 per month in a equity mutual fund scheme tracking the Nifty 50 benchmark for 20 years. Over this period, the total amount invested would have been ₹36,00,000 (₹15,000 per month x 12 months x 20 years). 

Assuming 8%, 9%, 10%, and 11% as annual rates of return, this investment could have potentially grown to the following amounts:

Note: As per AMFI Best Practice Guidelines dated 10th September 2024, the mean of 10-year rolling returns between 01/06/14 and 31/05/24 for Sensex is 12.62% CAGR, Nifty is 12.42% CAGR & Nifty 500 is 12.80% CAGR. Past performance may or may not be sustained in future and is not a guarantee of any future return.

So, now you know how compounding works in an SIP investment and what a ₹15,000 monthly SIP could potentially accumulate at different assumed rates of return. To recap, a Systematic Investment Plan (SIP) is a method of investing a predetermined amount at regular intervals in a mutual fund scheme. Each instalment purchases units at the prevailing NAV. 

If you had invested ₹15,000 per month, your investment could have potentially accumulated approximately ₹32 lakh in 10 years, ₹68 lakh in 15 years, or ₹1.25 crore in 20 years, assuming an annual return of 11%.

Note that these figures are illustrative estimates. Actual returns depend on market performance. The examples used only demonstrate how regular contributions, investment duration, and compounding can influence the potential value of an SIP investment.

For more information, you can visit www.tatamutualfund.com/deshkarenivesh. The Investor Service Centre of Tata Asset Management Pvt. Ltd. is located at Mulla House, Ground Floor, 51, M.G. Road, Near Flora Fountain, Mumbai – 400 001, Maharashtra. The office hours are Monday to Friday, 9:00 AM to 5:30 PM. For assistance, you can also call (022) 6282 7777 from Monday to Saturday, 9:00 AM to 5:30 PM, or email service@tataamc.com

1. How much can a ₹15,000 monthly SIP accumulate in 20 years?

A ₹15,000 monthly SIP would amount to total contributions of ₹36 lakh over 20 years. At different assumed annual returns, you may potentially accumulate:

• Approximately 88 lakhs @ 8%
• Approximately 1 crore lakhs @ 9%
• Approximately 1.1 crore @ 10%
• Approximately 1.25 crore @ 11%

Note: These are only illustrative estimates. The actual accumulated corpus would depend on market performance, and returns are not guaranteed.

2. Does a longer SIP investment period always lead to higher returns?

A longer investment period may provide more time for potential investment growth and compounding. However, it does not guarantee higher returns, as mutual fund investments are subject to market fluctuations. 

The final corpus depends on the returns generated, the investment duration, and the regularity of contributions.

3. Does increasing a monthly SIP amount help build a larger corpus?

Increasing the monthly SIP amount may potentially build a larger potential corpus, as more money is invested over time and can participate in market-linked growth. 

However, the final value still depends on investment returns.

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