SIP Calculation: How can a monthly SIP of just ₹250 create a corpus of ₹2.30 crore? Here's the full calculation..

What can you buy with ₹250? A coffee, a movie ticket, or a mobile recharge... But if this ₹250 is invested in the right way every month, this small amount can create a fund worth ₹2.30 crores in the long run. Hard to believe, right? But it's absolutely true. By investing ₹250 every month in a mutual fund SIP, the magic of compounding and long-term patience can transform your savings into a fund worth crores.

Now the question is: how can a SIP of just ₹250 create such a large fund, and how long will it take? So let's understand the complete calculation (SIP calculation) for 10, 20, 30, and 40 years.

What is a SIP and how does it work?

SIP stands for Systematic Investment Plan, where you invest a fixed amount every month. This is where the effect of compounding adds up. If you invest regularly in a fund with a 16% annual return and let the money grow without withdrawing it over a long period of time, even a small amount can become a substantial amount of wealth.

Calculation for a ₹250-a-month SIP over 40 years
Term (years) Total Investment (₹) Expected Return (16% annually) Total Fund Value (₹)
10 years ₹30,000 ₹52,000 (approximately ₹82,000)
20 years ₹60,000 ₹2,80,000 (approximately ₹3,40,000)
30 years ₹90,000 ₹1,800,000 (approximately ₹18.9 lakh)
40 years ₹1,20,000 ₹2.28 crore (approximately ₹2.30 crore)
(Note: This is an approximate calculation; actual returns will depend on the market.)

How can such a large fund be created from such a small amount?
Indeed, the true power lies in long-term growth and compounding. By depositing ₹250 for 40 years, your total investment is only ₹1.2 lakh, but with a 16% return every year, this amount grows to ₹2.30 crore. This means that the earlier you start, the greater your benefits.

Planning from Children's Education to Retirement
If you skip eating out or coffee once a month, that ₹250 can be used for your retirement fund or your children's education. The most important thing in a SIP is consistent investment and time. Even if the amount is small, regularity can create great wealth.

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