Investment Summary

Monthly SIP Amount ₹2,000
Annual Return Rate (assumed) 12%
Investment Period 5 years (60 months)
Total Amount Invested ₹1,20,000
Estimated Wealth Gained ₹44,973
Maturity Value after 5 Years ₹1,64,973

Key Insight: You invest ₹1,20,000 over 5 years, but your money grows to ₹1,64,973. The extra ₹44,973 comes purely from compounding - your money earning returns on returns every month.

SIP Returns Across Different Time Periods

See how the same monthly investment grows exponentially over time:

Time Period Total Invested Wealth Gained Maturity Value
5 years ₹1,20,000 ₹44,973 ₹1,64,973
10 years ₹2,40,000 ₹2,24,678 ₹4,64,678
15 years ₹3,60,000 ₹6,49,152 ₹10,09,152
20 years ₹4,80,000 ₹15,18,296 ₹19,98,296
25 years ₹6,00,000 ₹31,95,270 ₹37,95,270
30 years ₹7,20,000 ₹63,39,828 ₹70,59,828

Year-Wise Growth Breakdown

Year Total Invested Returns Earned Portfolio Value
Year 1 ₹24,000 ₹1,619 ₹25,619
Year 2 ₹48,000 ₹6,486 ₹54,486
Year 3 ₹72,000 ₹15,015 ₹87,015
Year 4 ₹96,000 ₹27,670 ₹1,23,670
Year 5 ₹1,20,000 ₹44,973 ₹1,64,973

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Frequently Asked Questions

How much will ₹2,000 SIP give after 5 years?

At 12% annual returns, a monthly SIP of ₹2,000 grows to ₹1,64,973 in 5 years. You invest ₹1,20,000 and earn ₹44,973 as returns - a wealth gain of 37%.

Is SIP better than FD for long-term goals?

For 5+ year goals, SIP in equity mutual funds has historically outperformed FDs significantly. An FD at 7% would give you around ₹1,69,773 on the same ₹1,20,000 lump sum, vs SIP's potential ₹1,64,973 through regular investing.

What if returns are lower - say 10% instead of 12%?

At 10% annual returns, your ₹2,000/month SIP for 5 years would grow to ₹1,56,165. At 8% it would be ₹1,47,933. Starting early and staying invested matters more than chasing the exact return rate.

What is the best SIP amount to start with?

Start with what you can sustain consistently. Even ₹500/month builds the habit. The real power of SIP is rupee cost averaging - buying more units when markets fall, fewer when they rise. Increase your SIP by 10% every year (step-up SIP) to dramatically boost the final corpus.

How is SIP taxed in India?

Each SIP instalment is treated as a separate investment. For equity funds: gains held over 12 months are LTCG taxed at 12.5% above ₹1.25 lakh exemption (post Budget 2024). Gains under 12 months are STCG at 20%. For debt funds, all gains are taxed at your income slab rate.

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