SIP: A ₹5,000 SIP is ideal for becoming a crorepati, but you can start with as little as ₹500.

SIP Investment: You can start a mutual fund SIP with just ₹500 per month. Let’s explore how to determine the right SIP amount based on your salary and expenses to build a substantial corpus.

Mutual Fund SIP: If you wish to start investing in mutual funds but are unsure about the monthly SIP amount, consider your salary and expenses first. Investing begins not with a large sum, but with the right mindset and an understanding of your expenses. Even a small SIP can grow into a significant fund over time, thanks to the power of compounding, proving highly beneficial in the long run.

You can start a mutual fund SIP with as little as ₹500 per month. So, even if you earn a modest income or have just started your career, beginning your investment journey is easy. You can also increase your SIP amount as your salary rises over time.

How much of a corpus can be built with SIPs ranging from ₹500 to ₹5,000?

If you invest consistently for 25 years and earn an average annual return of 12%, the estimated corpus would look something like this:

₹500 monthly SIP: Total investment ₹1.50 lakh; estimated corpus ~₹9.5 lakh
₹1,000 monthly SIP: Total investment ₹3 lakh; estimated corpus ~₹19 lakh
₹5,000 monthly SIP: Total investment ₹15 lakh; estimated corpus ~₹95 lakh

If you start a ₹500 monthly SIP at age 25 and continue investing for 35 years, your total investment would be ₹2.10 lakh, and based on an estimated 12% return, you could build a corpus of approximately ₹32 lakh.

Increase your SIP as your salary grows.

If your salary increases annually, try to increase your SIP contribution by 10–15% as well. In other words, by increasing a ₹5,000 SIP by 10% annually, the corpus accumulated over the long term can be significantly larger than a standard SIP.

Keep these points in mind:

Start an SIP amount that you can easily sustain over the long term.
Aim for an investment horizon of at least 10–15 years.
Avoid stopping your SIP during market downturns.
Try to increase your investment amount every year.
Invest with future needs in mind, rather than without a specific goal.

How does compounding grow your money?

The biggest advantage of an SIP is compounding. Compounding means that you earn returns not only on your invested capital but also on the profits generated from it. This is why even small SIPs can grow into a substantial corpus over the long term. Therefore, the sooner you start investing, the better it is for you.