The inflow of investment into mutual funds through the SIP route has been astounding in 2024. Data from AMFI (Association of Mutual Funds in India) have shown that even volatilities in the equity market have not been able to significantly dent the inflow through SIPs. In December 2024, it rose to Rs 26,459 crore from Rs 17,610 crore in December 2023.
Now let’s turn to the number of folios in the industry. The number of folios was recorded at 16.89 crore in January 2024 and it surged to 22.50 crore in December 2024, recording a surge of 33.21% in 12 months. The AUM (assets under management) of mutual fund industry stood at Rs 66.66 lakh crore in December 2024, up 27.11% from Rs 52.44 lakh crore in January 2024.
Crorepati goal estimate with SIP calculator
One can use a mutual fund SIP calculator which is available online for the purpose. A goal-based SIP calculator can be even more useful. A 5-year period to reach a goal of Rs 1 crore is not easy but certainly not impossible, the calculator will show. If one wants to amass Rs 1 crore through the SIP route in 5 years flat, one has to invest nothing less than Rs 1.22 lakh every month.
There is an implicit assumption in this projection. Mutual fund calculators offer a template return of 12% on which they base their calculations. However, any user can change it to get various scenarios. Obviously, one can obtain higher returns from many equity-oriented funds if the markets are favourable. Humbler returns will demand a higher monthly SIP of if one wants to make the same Rs 1 crore in the same time period.
The SIP calculation using different rates of return
Using a goal-based SIP calculator, one can get an idea of the sort of investments that one needs to do every month in order to realise a crorepati goal through mutual fund SIP. In the following calculation, two rates of return have been assumed – one is 12% and the other is a less ambitious 10%.
Scenario 1
Goal: To build a corpus of Rs 1 crore
Duration of investment: 5 years
Expected rate of return: 12%
SIP (monthly): Rs 1.22 lakh
Total investment by investor: Rs 73.47 lakh
Scenario 2
Goal: To build a corpus of Rs 1 crore
Duration of investment: 5 years
Expected rate of return: 10%
SIP (monthly): Rs 1.29 lakh
Total investment by investor: Rs 77.48 lakh
(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.)
The systematic investment plan (SIP) in mutual funds has emerged as a darling for middle class investors in India. It has become a vehicle of ensuring inflation-beating returns. But aggressive investment through SIPs can also help in achieving crorepati goal in a limited period of time. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
