Examples of 5000 SIP for 10 Years
These examples illustrate how SIPs can help individuals achieve diverse financial objectives, whether it's funding higher education, planning for a dream vacation, or building an emergency fund. By tailoring investments to their risk appetite and time horizon, individuals can turn their financial aspirations into reality.
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Example 1: Large-Cap Fund
Scenario: Rohan, a 28-year-old software engineer, aims to build a corpus for his daughter's higher education. He chooses a large-cap fund, known for stability and consistent returns, with an expected 10% annual return.
- Monthly SIP Amount: ₹5,000
- Investment Period: 10 years
- Fund Type: Large Cap
- Annualised Returns: 10% CAGR
- By using an SIP calculator, we will get: By the time his daughter reaches college age (38), his investment grows to approximately ₹9.28 lakhs. This corpus can significantly contribute to her higher education expenses.
- Investment: ₹6L
- Returns: ₹4.07L
- Total Corpus: ₹10.1L
Example 2: Mid-Cap Fund
Scenario: Neha, a 35-year-old entrepreneur, is looking to expand her business. She invests in a mid-cap fund, balancing growth potential with moderate risk, with an expected 12% annual return.
- Monthly SIP Amount: ₹5,000
- Investment Period: 10 years
- Fund Type: Mid Cap
- Annualised Returns: 12% CAGR
- By using an SIP calculator, we will get:
- Investment: ₹6L
- Returns: ₹5.28L
- Total Corpus: ₹11.2L
Example 3: Small-Cap Fund
Scenario: Vikram, a 25-year-old aspiring investor, is willing to take on higher risks for potentially greater rewards. He invests in a small-cap fund, aiming for long-term capital appreciation with an expected annual return of 15%.
- Monthly SIP Amount: ₹5,000
- Investment Period: 10 years
- Fund Type: Small Cap
- Annualised Returns: 15% CAGR
- By using an SIP calculator, we will get:
- Investment: ₹6L
- Returns: ₹7.15L
- Total Corpus: ₹13.2L
Which Fund Types to Choose for a ₹5000 SIP for 10 Years?
The following guide can help you decide the best type of mutual fund to start your SIP:
- Large-cap Funds: These are safer equity funds that invest in big, well-established companies. They offer steadier growth and fewer ups and downs. It is suitable for investors who prefer stability.
- Large & Mid-cap/Flexi-Cap Funds: These funds combine large companies with mid-sized ones. They offer a balance of growth and stability, making them a good middle option for most investors.
- Mid-cap and Small-cap Funds: These focus on growing and emerging companies. They can offer higher returns over the long term, but also come with greater fluctuations. Best for investors who can stay invested during market volatility.
- Hybrid (balanced) Funds: These invest in both equity and debt. The mix reduces risk and gives smoother returns compared to pure equity funds. Ideal for moderate-risk investors.
- Debt or Ultra-short Duration Funds: These are designed for short-term goals and safety. They are not suitable for long-term wealth building, such as a 10-year SIP, because the returns are lower.
How Compounding Works for a ₹5,000 SIP for 10 Years?
Total invested amount = ₹6,00,000 (₹5,000 × 120 months)
This table shows how even small differences in return rates create a big jump in your final wealth.
| Invested Amount |
Investment Period |
Annual Return (CAGR) |
Total Corpus After 10 Years |
Wealth Created (Over Invested Amount) |
| ₹5,000 |
120 months |
8% |
₹9,20,828 |
₹3,20,828 |
| ₹5,000 |
120 months |
10% |
₹10,32,760 |
₹4,32,760 |
| ₹5,000 |
120 months |
12% |
₹11,61,695 |
₹5,61,695 |
| ₹5,000 |
120 months |
15% |
₹13,93,286 |
₹7,93,286 |
What This Shows
- A difference of just 2% in annual returns can create over ₹1 lakh more wealth in 10 years.
- At 15% returns, your money grows by almost ₹8 lakh, showing how long-term compounding multiplies your savings.
- This is why choosing the right fund type matters so much for a 10-year SIP.
Why Should You Start Investing Today?
The power of compounding with SIPs lies in their simplicity, flexibility, and the potential to grow your wealth consistently over time. Starting today, even with a modest monthly amount like ₹5,000, can help you achieve your long-term financial aspirations. The earlier you begin, the more time your investments have to compound, maximising returns and mitigating the impact of market fluctuations.
