Investing in mutual funds via a Systematic Investment Plan (SIP) is one of the most popular ways to build long-term wealth. But how much can a monthly SIP of Rs 3,000 grow over 15 years? Let’s break it down.

How SIP Works

  • SIP (Systematic Investment Plan) allows you to invest a fixed amount every month in mutual funds.
  • The invested amount grows with compounded returns, which depend on market performance.

Example Calculation

  • Monthly SIP: Rs 3,000
  • Investment Period: 15 years (180 months)
  • Expected Annual Return: 12% (average for equity mutual funds)

Formula for SIP Maturity Value:

FV=P×(1+r)n−1r×(1+r)FV = P \times \frac{(1 + r)^n - 1}{r} \times (1 + r)FV=P×r(1+r)n−1×(1+r)

Where:

  • PPP = monthly SIP amount
  • rrr = monthly rate of return (annual rate ÷ 12)
  • nnn = total number of months

Step-by-Step Calculation:

Monthly rate of return r=12%÷12=1%=0.01r = 12\% ÷ 12 = 1\% = 0.01r=12%÷12=1%=0.01

Total months n=15×12=180n = 15 × 12 = 180n=15×12=180

(1+r)n=(1.01)180≈6.1(1 + r)^n = (1.01)^{180} ≈ 6.1(1+r)n=(1.01)180≈6.1

Maturity value FV≈3000×6.1−10.01×1.01≈3000×510×1.01≈15.46 lakhFV ≈ 3000 × \frac{6.1 - 1}{0.01} × 1.01 ≈ 3000 × 510 × 1.01 ≈ 15.46 \text{ lakh}FV≈3000×0.016.1−1×1.01≈3000×510×1.01≈15.46 lakh

Result:

By investing Rs 3,000 per month for 15 years at an average return of 12%, you can accumulate approximately Rs 15.5 lakh.

Conclusion

Even a moderate SIP can grow into a substantial corpus over time, thanks to the power of compounding. Starting early and staying consistent is the key to building long-term wealth.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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Balasahana Suresh

14/12/2025 08:11 AM