Turn ₹2,000 into ₹2 crore—how can the dream of becoming a millionaire (crorepati) be realized? Check the calculation..

Saving just ₹2,000 per month can make you a millionaire; however, this requires not a large initial investment, but rather a long time horizon and disciplined investing. Mutual fund SIPs (Systematic Investment Plans) benefit from the power of compounding, where the returns earned on your investment begin to generate further returns over time. The time required to reach a target of ₹2 crore will depend on the average rate of return earned on your investment.

Detailed Calculation for a ₹2,000 SIP

If you invest ₹2,000 every month in a mutual fund, your corpus could grow as follows, based on different rates of return:

Monthly Investment: ₹2,000
Annual Investment: ₹24,000
Estimated Calculation: Based on regular monthly investments, with annual returns compounded on a monthly basis.

Estimated Annual Return | Total Duration | Total Amount Invested | Benefit from Compounding

Why is Compounding in SIPs Significant?
In the early years of an SIP, the growth of your fund may appear slow because the invested amount is relatively small. However, as the investment tenure increases, the returns already earned on your accumulated capital begin to generate additional earnings. This is the power of compounding.

Investors can also increase their SIP amount as their income grows. For instance, increasing your SIP contribution by 10% each year can significantly accelerate the growth of your fund over the long term—though this will also increase the total amount invested.

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