Mutual Fund investment: How to become a crorepati by investing in SIPs

Kolkata: Recently published AMFI (Association of Mutual Funds in India) data show that in December 2024 the AUM (assets under management) of the mutual fund industry was recorded at Rs 66.66 lakh crore. The industry-wide AUM figure was Rs 52.44 lakh crore in January 2024. Also, there was a great jump in the number of folios, which are the “accounts” so to say, through which investments flow into mutual funds. This number has surged from 16.89 crore in January 2024 to 22.50 crore in December 2024.

Despite volatilities, the SIP contribution in December 2024 reached an all-time high of Rs 26,459 crore. SIP inflows have continued their upward trend steadily. AMFI data show that the inflows through SIP stood at Rs 17,610 crore in the month of December 2024.

Crorepati using mutual fund SIP calculator

A goal-based SIP calculator is the most effective way of doing this calculation. This calculator shows if one wants to become a crorepati through this route in 15 years with a 12% return on investment, one has to invest Rs 20,016.81 every month (in which case the out-of-pocket investments will be Rs 36.03 lakh).

Now consider an impatient investor, one who is not ready to wait for 15 years to make up Rs 1 crore. In case the investor wants to achieve his/her target in 10 years, he/she has to invest Rs 43,470.95 a month. In this case too, the rate of return is assumed to be 12%, which happens to be the template rate of return in mutual fund industry. There are many funds which offer a higher rate of return. And if a higher return can be obtained the goal of making Rs 1 crore can be reached in a shorter time.

If you want to reach the target of Rs 1 crore in 12 years, it is clear that your investment per month will lie between the two monthly SIPs mentioned above. If one invests Rs 31,341.91 a month for 12 years, the target of making Rs 1 crore will be reached (with a 12% rate of return).

(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)