Corpus: ₹50.0L at 12% · Total invested: ₹12.0L · Wealth gain: ₹38.0L
| Annual Return | Total Invested | Maturity Value | Wealth Gain |
|---|---|---|---|
| 8% | ₹12,00,000 | ₹29,64,736 | ₹17,64,736 |
| 10% | ₹12,00,000 | ₹38,28,485 | ₹26,28,485 |
| 12% | ₹12,00,000 | ₹49,95,740 | ₹37,95,740 |
| 14% | ₹12,00,000 | ₹65,81,731 | ₹53,81,731 |
| 15% | ₹12,00,000 | ₹75,79,775 | ₹63,79,775 |
A ₹5,000/month SIP represents a significant financial commitment — typically suited to professionals with stable incomes looking to build a substantial corpus for major goals like retirement, children's education, or a home purchase. A 20-year SIP tenure is where compounding truly transforms wealth. At this horizon, short-term market volatility becomes irrelevant. A ₹5,000/month SIP invested for 20 years turns ₹12.0L of principal into ₹50.0L — a wealth gain of ₹38.0L.
At a 12% annualised return — the long-run historical average for diversified equity mutual funds in India — a ₹5,000/month SIP for 20 years produces a corpus of ₹50.0L. 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 ₹12.0L investment grows to ₹50.0L, generating ₹38.0L in wealth gain (316% return on invested capital). Notably, roughly ₹38.3L 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 | ₹60,000 | ₹64,047 | ₹4,047 |
| Year 2 | ₹1,20,000 | ₹1,36,216 | ₹16,216 |
| Year 3 | ₹1,80,000 | ₹2,17,538 | ₹37,538 |
| Year 4 | ₹2,40,000 | ₹3,09,174 | ₹69,174 |
| Year 5 | ₹3,00,000 | ₹4,12,432 | ₹1,12,432 |
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 ₹5,000/month SIP for 20 years gives a maturity corpus of ₹49,95,740. Your total investment is ₹12,00,000 and the wealth gain is ₹37,95,740.
At 8%: ₹29,64,736. At 10%: ₹38,28,485. At 12%: ₹49,95,740. At 15%: ₹75,79,775. 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 ₹5,000 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.