Want to be a crorepati? Here's how much SIP you need to reach ₹5 crore in 25 years

Mutual fund SIPs are an excellent method to accumulate wealth and manage your portfolio. While the SIP amount also reached an all-time high of Rs. 14,276 crores in March, the net inflows into equity funds managed to demonstrate a strong upward trend in March with net inflows of Rs. 20,534 crores, which are up over 30% from February 2023. Since mutual funds are advised for the long term, they not only help you minimise market risk and volatility but also maximise returns through compounding. Here we have taken an example of how much SIP is required to make a corpus of ₹5 Cr in a long run of 25 years from various industry experts.

Santosh Navlani, COO, ET Money

To accumulate a corpus of ₹5 crore in 25 years, remember a simple formula – 25-12-25. All you need to do is start a SIP of 25,000 for 25 years. If your returns are 12%, you will make close to ₹5 crore. In this way, you will create a corpus of ₹4.74 crore, to be precise. What if you want a ₹5 crore corpus after paying all the taxes? Then you need a SIP of ₹29,200.

As this is a long-term investment, investors should take a portfolio approach to achieve this goal. They must invest in equity, debt and gold. Using asset allocation and rebalancing at least once a year helps reduce portfolio volatility. Most investors only focus on numbers and calculators. But in such a long investment journey, the curtailing risk is more important than chasing returns. You will accumulate wealth if you remain in the market. But most investors are not able to remain invested. 

Let’s say you end up making 11% returns instead of 12%. In this case, you will need to remain invested for 27 years to accumulate the targeted ₹5 crore corpus. However, if you stop investing, you will end up far from this goal. On every sharp market correction, investors give in to the fear and stop their SIPs. That’s why most investors don’t reach their goals. 

When you reduce risk through asset allocation, your portfolio doesn’t fall as much as the market during corrections, thus giving you the confidence to stay invested for the long term. Another important factor is increasing your SIP every year as your income grows. It helps you to reach your goal faster. If you increase your ₹25,000 SIP by 10% every year, you can accumulate ₹5.5 crore in just 21 years.

Gautam Kalia, Senior VP and Super Investor at Sharekhan by BNP Paribas

You will need a total SIP of Rs.26,600 pm to create a corpus of Rs.5 Crs in next 25 years and if you are okay to increase the SIP amount by 10% every year, then the same goal of Rs.5 Crs can be achieve in SIP amount of just Rs.12,500pm in the first year.

S. Ravi Promoter & Managing Partner, Ravi Rajan & Co. LLP

Setting a financial goal is important to ensure that you have a clear vision of what you want to achieve. It helps in creating a disciplined approach towards investment and inculcates a habit of regular savings.

Monthly SIPs are a great way to accumulate wealth over the long term. It is a systematic and disciplined approach towards investing which helps in averaging out the cost of investment over a period of time.

To accumulate a corpus of ₹5 Cr in 25 years, it is important to choose the right mutual funds that have a track record of consistent performance. It is advisable to diversify the portfolio across different asset classes and investment styles to reduce the risk. One can evaluate the offerings of multiple financial institutions before taking a decision where to invest.

Some of the mutual funds that could be considered for investing in a Monthly SIP to accumulate a corpus of ₹5 Cr in 25 years are Mirae Asset Large Cap Fund, Axis Long Term Equity Fund, Kotak Emerging Equity Fund, and HDFC Small Cap Fund. These funds have a track record of consistent performance and are managed by experienced fund managers.

Suman Bannerjee, CIO, Hedonova

The monthly SIP required to accumulate a corpus of ₹5 Cr in 25 years depends on the expected rate of return. Assuming an annual rate of return of 12%, the monthly SIP required would be approximately ₹53,300. Investors should consult with a financial advisor to determine an appropriate asset allocation and mutual funds that suit their investment objectives.

Some mutual funds that investors can consider for long-term investment include:

1. Large-cap equity funds such as Axis Bluechip Fund, ICICI Prudential Bluechip Fund, and SBI Bluechip Fund.

2. Mid-cap equity funds such as HDFC Mid-Cap Opportunities Fund, Kotak Emerging Equity Fund, and ICICI Prudential Midcap Fund.

3. Diversified equity funds such as Mirae Asset India Equity Fund, Aditya Birla Sun Life Equity Fund

It is important to remember that past performance is not indicative of future returns, and investors should always consult with a financial advisor before making any investment decisions.

Amit Gupta, MD, SAG Infotech

To accumulate a corpus of Rs. 5 crore in 25 years through SIP, you need to have a disciplined approach to investing a substantial amount every month. The monthly SIP amount required to accumulate Rs. 5 crore depends on various factors such as your risk appetite, investment horizon, expected returns, and inflation rate. Assuming a moderate annual return of 12% (historical average of equity mutual funds) and an inflation rate of 6%.

We can find that you need to invest approximately Rs. 55,000 per month to accumulate a corpus of Rs. 5 crore in 25 years. Here are some mutual fund suggestions that you can consider for long-term wealth creation:

1. Mirae Asset Large Cap Fund

2. Axis Bluechip Fund

3. SBI Focused Equity Fund

4. ICICI Prudential Equity & Debt Fund

5. Kotak Standard Multicap Fund

Please note that these are only suggestions, and you should conduct your own research before making any investment decisions. Additionally, past performance is not indicative of future results. It's also important to understand that investing in mutual funds involves risk and you should consult with a financial advisor before making any investment decisions.

Ujjawal Pahwa, Content Creator - Finance, CS

You need a monthly SIP of ₹31,250 to reach a corpus of 5 Cr in 25 years @12%

You need a monthly SIP of ₹19,850 to reach a corpus of 5 Cr in 25 years @15% (Equity mutual fund - mainly mid and small cap).

You need a monthly SIP of ₹42,360 to reach t a corpus of 5 Cr in 25 years @10% Conservative Hybrid Funds).

Some Mutual Funds:

1. Nippon India Growth Fund (Very Risky - CAGR 20% since inception)

2. ICICI Pru Equity and Debt Fund (Hybrid Fund)

3. Quant Tax saver Fund and Mirae Asset Tax saver fund

4. Icici Pru US Bluechip fund (for US Equity investing)