Building a ₹1 crore corpus through monthly SIPs depends on your investment amount and returns. With a 12% annual return, a ₹10,000 monthly SIP takes 21 years to reach the goal. Investing ₹20,000 cuts this to 15 years, while ₹30,000 gets you there in 13 years. Many investors use this strategy.

Building a retirement or long-term investment corpus of ₹1 crore is a major financial milestone for many investors. A systematic investment plan (SIP) in mutual funds can help achieve this goal by allowing individuals to invest a fixed amount regularly rather than committing a large sum at once.However, the time required to accumulate ₹1 crore depends on several factors, including the monthly investment amount, investment duration and returns generated by the mutual fund scheme.Investors can choose from different categories of mutual funds, including equity, hybrid and debt funds, depending on their financial goals and risk appetite.What is a systematic investment plan (SIP)?An SIP is an investment facility offered by mutual funds that allows investors to contribute a fixed amount at regular intervals, such as weekly, monthly or quarterly.Instead of investing a lump sum, investors can gradually build wealth through regular contributions.

SIPs also help develop financial discipline and allow investors to benefit from rupee-cost averaging over the long term.

Expected returns from equity, hybrid and debt funds

The time taken to reach a ₹1 crore corpus largely depends on the returns generated by investments.

According to 10-year mutual fund performance data from Value Research, several equity mutual fund categories have delivered annualised returns exceeding 12%. Hybrid fund categories have delivered returns of around 10%, while debt fund categories have generated approximately 8% annualised returns.

For calculation purposes, annualised returns of 12% for equity funds, 10% for hybrid funds and 8% for debt funds have been assumed.

These figures are illustrative assumptions and should not be treated as guaranteed returns. Past performance does not ensure similar returns in the future.

Time required to build ₹1 crore with a 12% SIP return

Assuming an annualised return of 12% from an equity mutual fund investment, the time required to accumulate ₹1 crore would vary depending on the monthly SIP contribution.

₹10,000 monthly SIP: Approximately 21 years.

₹20,000 monthly SIP: Approximately 15 years.

₹30,000 monthly SIP: Approximately 13 years.

A higher monthly contribution can significantly reduce the investment period required to reach the target.

Time required to build ₹1 crore with a 10% SIP return

If an investor earns an assumed annualised return of 10% from a hybrid mutual fund, the investment timeline would be longer.

₹10,000 monthly SIP: Approximately 23 years.

₹20,000 monthly SIP: Approximately 17 years.

₹30,000 monthly SIP: Approximately 14 years.

Hybrid funds generally invest in a combination of equity and debt instruments, offering a different risk-return profile from pure equity funds.

Time required to build ₹1 crore with an 8% SIP returnFor investors assuming an annualised return of 8% from debt mutual funds, the time required to achieve the ₹1 crore milestone would be: ₹10,000 monthly SIP: Approximately 26 years. ₹20,000 monthly SIP: Approximately 19 years. ₹30,000 monthly SIP: Approximately 15 years.Debt funds generally invest in fixed-income securities and may be suitable for investors seeking relatively lower volatility, although they also carry interest rate and credit risks.What should investors keep in mind?These calculations are indicative and based on assumed annualised returns.

Actual mutual fund returns can fluctuate depending on market conditions and the performance of underlying investments.Investors should assess their financial goals, investment horizon and risk tolerance before selecting a mutual fund scheme. Consulting a qualified financial adviser can also help them choose an appropriate investment strategy to achieve their long-term wealth creation goals.