SOURCE : NEW18 NEWS
Last Updated:May 19, 2025, 18:31 IST
Here’s how you can create a corpus of Rs 1 crore in 10, 15, or 20 years with minimum monthly savings using SIP and step-up SIP strategies.
Experts suggest mutual fund SIPs as one of the effective ways to create your wealth and beat inflation. (AI Generated)
Securing your financial future should be one of the top priorities, as it reduces stress during the higher ages. For this, saving is a must. The earlier you start saving, the bigger corpus you will end up creating with less effort. Saving your money without investing it anywhere will have a negative effect as inflation will erode away your money over the years. Here’s how you can create a corpus of Rs 1 crore in 10, 15, or 20 years with minimum monthly savings:
Financial experts suggest mutual funds (MFs) are one of the effective ways to create your wealth and beat inflation. Investments in mutual funds can be done monthly or lump sum. Monthly investment in mutual funds is called a systematic investment plan (SIP).
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What Is Step-Up SIP?
A step-Up SIP is a systematic investment plan where you increase your monthly investment amount by a fixed percentage each year — let’s say, 10 per cent. This helps align your investments with your growing income and reduces the initial burden.
The Financial Plan To Reach Rs 1 Crore
Target Corpus: Rs 1 crore
Expected Return: 12% per annum
Investment Frequency: Monthly (SIP)
Step-Up Rate: 10% annual increase in SIP (for Step-Up calculations)
Investment Horizon: 10, 15, and 20 years
Why 12% Return?
Equity mutual funds and index funds in India have historically delivered 10–14 per cent annualised returns over the long term. We use 12 per cent as a conservative yet realistic return assumption.
How Much To Invest Monthly — With and Without Step-Up SIP?
In order to save Rs 1 crore in 15 years, you need a monthly SIP of Rs 23,000 (without step-up). However, if you raise your SIP by 10% every year, you will require Rs 9,000 per month initially.
In order to create a corpus of Rs 1 crore in 20 years, you need a monthly SIP of Rs 4,800 only for the first year. However, it will have to be increased by 10 per cent every year.
Here’s the table indicating SIP amount (with or without step-up) to create a wealth corpus of Rs 1 crore:
Monthly SIP Amount Required to Reach Rs 1 Crore
| Investment Duration | Expected Return (CAGR) | Monthly SIP (Without Step-Up) | Monthly SIP (With 10% Annual Step-Up) |
|---|---|---|---|
| 10 Years | 12% | Rs 43,000 | Rs 27,000 |
| 15 Years | 12% | Rs 20,000 | Rs 10,500 |
| 20 Years | 12% | Rs 11,000 | Rs 4,800 |
Note: Step-up SIP assumes a 10% increase in monthly contribution every year.
Where Should You Invest This SIP?
The SIP amount will be invested in mutual funds — flexi cap funds, large- & mid-cap funds, mid-cap funds, small-cap funds, and index funds.
These are the classification based on the size or the company and the risk profile of the investor. While index funds typically give an annual return of 12-14 per cent, mid-cap and small-cap can give a CAGR of around 18 per cent in the long term. However, small-cap and mid-cap funds carry relatively higher risk.
Some of the popular mutual fund schemes are Parag Parikh Flexi Cap Fund, JM Financial Flexi Cap, Motilal Mid Cap Fund, HDFC Mid Cap Fund Opportunity Fund, Kotak Emerging Equity Fund, Nippon India Small Cap Fund, Axis Small Cap Fund, and Bandhan Small Cap Fund.
How to Choose the Right SIP Fund?
| Time Horizon | Recommended Fund Type | Risk Level | Return Potential (CAGR) |
|---|---|---|---|
| 10 Years | Flexi Cap / Mid Cap Funds | Moderate to High | 12–14% |
| 15+ Years | Mid Cap / Small Cap Funds | High | 13–15% |
| 20 Years | Multi Cap / Index Funds | Moderate | 11–13% |
Tip: For passive investors, Index Funds or ETFs offer simplicity and low cost.
Mutual Fund Expenses: What You Need To Be Careful
Mutual Funds are subject to market risks. They also carry expense ratio, which are charged irrespective of the returns you make. One same mutual fund scheme might have different expense ratio on different platforms — go for cheaper one.
There is an exit charge also if you redeem within a particular period, let’s say within 90 days.
What Will Be The Value Of Rs 1 Crore After 20 Years, 30 Years, and 50 Years?
As the years pass, the money loses its value due to inflation. The value of Rs 100 is significantly lower than what it used to be 30 years ago.
After 20 years, Rs 1 crore will only be worth about Rs 31.18 lakh in today’s terms due to inflation.
After 30 years, Rs 1 crore will be worth around Rs 17.41 lakh in today’s currency.
After 50 years, Rs 1 crore will only be worth about Rs 5.43 lakh in today’s terms due to the compounding effect of inflation.
So, it is necessary to do financial planning after considering the inflation effect.
- First Published:
May 19, 2025, 18:31 IST
