Worked Example

How much corpus does a ₹10,000 monthly SIP build over 30 years at 12% CAGR?

Scenario

25-year-old starting SIP for retirement at age 60

Inputs

Years: 30
Inflation %: 6
Monthly sip INR: 10000
Expected return %: 12

Calculation

1.
Total invested over tenure
₹10,000 × 360 months → ₹36.00 L
2.
SIP future-value factor at given rate and tenure
[((1+r/12)^n − 1)/(r/12)] × (1+r/12) → 3,529.91x
3.
Final corpus
₹10,000 × 3529.91 factor → ₹3.53 Cr
4.
Wealth multiple on contributions
₹3,52,99,138 ÷ ₹36,00,000 → 9.8x

Conclusion

₹10,000 SIP over 30 years builds approximately ₹3.53 crore — roughly 10× the principal invested through 12% compounding.

Tradeoffs

Assumes 12% steady CAGR; real Indian equity returns vary year-to-year. With 6% inflation, ₹3.53Cr in 30 years has purchasing power of roughly ₹0.61Cr in today's money. Step-up SIP (10% annual) typically adds 25-40% to terminal corpus.

More in SIP Investing

What does a 10% annual step-up add to a ₹20,000 SIP over 25 years?

SIP InvestingHand-crafted

₹3.16 crore of additional terminal wealth from a 10% annual step-up — roughly 83% larger corpus than flat SIP. Equivalent to running a flat ₹36,600/month SIP for all 25 years, but starting at only ₹20K/month.

How much real diversification do 4 large-cap funds actually provide vs 1 Nifty 500 + 1 mid-cap?

SIP InvestingHand-crafted

Option B (2 index funds) provides MORE real diversification than Option A (4 active funds) — effective fund count 1.8 vs 1.5 — at a quarter of the TER. Over 25 years, the 0.75 percentage-point TER gap compounds to roughly 18-22% lower terminal wealth in Option A.

How much does a 1% TER difference cost over 25 years on a ₹10,000 SIP?

SIP InvestingHand-crafted

₹39 lakh of avoidable loss in terminal wealth from choosing the regular-plan variant of the same fund over 25 years. The 'cost' goes to the distributor as embedded commission, not to better fund management.