Business
Next Story
Newszop

SIP or step-up SIP: How you can save Rs 1 crore in 10 years

Send Push
How much money do I need to invest every month to accumulate Rs 1 crore in 10 years? Is it even possible for everyone to save Rs 1 crore in a decade? This question comes up again and again, be it a newspaper column or Youtube videos of 'fininfluencers'. Well, you can build a hefty corpus of Rs 1 crore or more if you invest wisely and diligently.

Let's find out what it takes to reach Rs 1 crore in ten years.

Go for a mutual fund systematic investment plan or SIP

If you want to accumulate a substantial corpus of a crore in a decade, the systematic investment plan or SIP could be your best friend. In a systematic investment plan, you invest a fixed amount of money at regular intervals, usually monthly, to build a considerable amount over a period of time. Even if you invest a relatively small amount in a mutual fund SIP every month, it will grow into a sizeable amount in the long term.

Now, you might wonder where to invest. To amass a crore in a decade, you have to invest in equity mutual funds. Equity investments typically offer higher returns than debt instruments. While they are riskier, equities have the potential to generate significant returns over the long term.


Don't get worked up by the recent volatility in the market. The longer you remain invested the risk of volatility will be lower. When you stay invested over the long term, some years of low or negative returns and some years of impressive returns will make the average returns quite reasonable. So, the longer you stay invested in equity mutual funds, the better return you will get.

Even after the market upheavals of the past decade, including the COVID-19 pandemic, 10-year SIP return for large-cap equity funds averages 12.19%. For flexi cap funds, the 10-year SIP return averages 13.8%. While equity investments are often considered risky, let's assume the returns as 9-12% to be on the conservative side.

How to get Rs 1 crore in 10 years with SIP


You need to invest Rs 52,400 every month for 10 years, assuming a 9% return on your investment.

If you get a 10% return from your investment, you have to invest roughly Rs 49,700 every month into an equity mutual fund SIP for a period of 10 years.

To gather Rs 1 crore in a decade, you can invest Rs 44,700 every month for 10 years if you get a slightly higher return of 12% on your investment.

It is clear that you need to invest a hefty amount every month for 10 years to reach the Rs 1 crore goal. However, despite 12% return, investing Rs 45000 for next 10 years this may be difficult for many individuals. This is when a step-up SIP can be beneficial.

Step-up SIP: How to accumulate Rs 1 crore in 10 years
In step-up SIP, you increase your monthly SIP amount every year by a certain percentage as your income grows. For instance, you start a monthly SIP of Rs 10,000 now. After a year, you will increase the amount by 10%. You will invest Rs 11,000 per month from the second year. Similarly, from the third year, you will start investing Rs 12,100 every month and so on.

To amass Rs 1 crore in 10 years, you can start investing a smaller amount and gradually increase it every year. Here's how you can invest

How to invest in step-up SIP to get Rs 1 crore in 10 years


As the table shows, if you get 12% from your investment and you can increase your investment annually by 10%, you can start your SIP journey with just Rs 30,600. If you are hiking your SIP by 7.5% every year, you can start investing with 33,800 per month, assuming your investment grows at a rate of 12%. To make it easier for you, we have calculated how much you need to invest every month to become a crorepati when you are increasing your SIP amount annually. It is clear that when your time horizon is fixed, the return from SIP will depend on the investment amount and rate of interest rate you get every year.
Loving Newspoint? Download the app now