Corpus: ₹30.0L at 12% · Total invested: ₹7.2L · Wealth gain: ₹22.8L
| Annual Return | Total Invested | Maturity Value | Wealth Gain |
|---|---|---|---|
| 8% | ₹7,20,000 | ₹17,78,842 | ₹10,58,842 |
| 10% | ₹7,20,000 | ₹22,97,091 | ₹15,77,091 |
| 12% | ₹7,20,000 | ₹29,97,444 | ₹22,77,444 |
| 14% | ₹7,20,000 | ₹39,49,039 | ₹32,29,039 |
| 15% | ₹7,20,000 | ₹45,47,865 | ₹38,27,865 |
A ₹3,000/month SIP is a solid commitment that many salaried professionals can sustain comfortably. At this level, you are investing seriously enough to build meaningful wealth over time. A 20-year SIP tenure is where compounding truly transforms wealth. At this horizon, short-term market volatility becomes irrelevant. A ₹3,000/month SIP invested for 20 years turns ₹7.2L of principal into ₹30.0L — a wealth gain of ₹22.8L.
At a 12% annualised return — the long-run historical average for diversified equity mutual funds in India — a ₹3,000/month SIP for 20 years produces a corpus of ₹30.0L. This is enough to fund a solid down payment on a home in a Tier 2 city, full funding for a child's graduation, or a comfortable retirement corpus supplement. Of course, actual returns will vary, but this gives you a realistic benchmark for goal planning.
The power of compounding is clearly visible in this SIP: your ₹7.2L investment grows to ₹30.0L, generating ₹22.8L in wealth gain (316% return on invested capital). Notably, roughly ₹23.0L of your total wealth gain — more than half — is generated in the second half of the 20-year period. This is the compounding snowball effect: the longer you stay invested, the faster your corpus grows.
This table shows how your SIP corpus builds year by year, assuming 12% annual returns — the long-run historical average for diversified equity funds.
| Year | Total Invested | Corpus Value | Wealth Gain |
|---|---|---|---|
| Year 1 | ₹36,000 | ₹38,428 | ₹2,428 |
| Year 2 | ₹72,000 | ₹81,730 | ₹9,730 |
| Year 3 | ₹1,08,000 | ₹1,30,523 | ₹22,523 |
| Year 4 | ₹1,44,000 | ₹1,85,505 | ₹41,505 |
| Year 5 | ₹1,80,000 | ₹2,47,459 | ₹67,459 |
For a 20-year SIP, you have maximum flexibility to take risk and benefit from long-term compounding: Small Cap Funds — historically highest returns over long horizons (15%+ CAGR), suitable for 20+ year tenures; Mid Cap Funds — strong risk-adjusted returns; Large Cap Index Funds — stable core holding; International/Global Funds — geographic diversification against INR depreciation. A classic allocation: 40% large cap index + 30% mid cap + 20% small cap + 10% international.
Calculate with different amounts, rates, and tenures
Open SIP Calculator →At 12% annual returns, a ₹3,000/month SIP for 20 years gives a maturity corpus of ₹29,97,444. Your total investment is ₹7,20,000 and the wealth gain is ₹22,77,444.
At 8%: ₹17,78,842. At 10%: ₹22,97,091. At 12%: ₹29,97,444. At 15%: ₹45,47,865. Returns are not guaranteed — equity mutual funds can deliver higher or lower depending on market conditions.
SIP returns are subject to capital gains tax. For equity mutual funds held for more than 1 year, gains above ₹1 lakh/year are taxed at 12.5% (LTCG). ELSS SIPs have a 3-year lock-in but qualify for Section 80C deduction up to ₹1.5 lakh/year.
Yes — this is the entire benefit of SIP. When markets fall, your ₹3,000 buys more units at lower prices (rupee cost averaging). Stopping a SIP during a downturn defeats the purpose and locks in temporary losses.
For a 20-year horizon, a diversified equity mutual fund — large cap index fund (Nifty 50 or Sensex) combined with a mid cap fund — is a strong choice. For higher risk appetite, include a small cap fund component.