Looking to get Rs 1 crore as returns from Systematic Investment Plan (SIP)? Even though, achieving this goal may look overwhelming and unattainable, it is indeed possible with systematic planning and execution, say experts.

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With SIP, investors can regularly put a fixed sum in mutual fund schemes. Monthly investments for a long-term in SIPs can do the trick, with the power of compounding and can help one in generating good returns.

"With compound interest, the interest that one earns increases with the increase in the investment,: according to Scripbox – a mutual fund investment platform.

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For investors, who want to earn Rs 1 crore from SIP, the investment amount may differ with the investment cycle.

As per the calculations provided by Scripbox, by starting a SIP of Rs 7,000 per month, it is possible to get over Rs 1 crore as maturity value in 20 years of saving (given the rate of return is 10 percent for the mutual fund).

"However, this does not mean that the corpus will not fluctuate. The time horizon ensures that despite losses and gains cancelling each other out, the rate of return remains consistent," says Prateek Mehta, co-founder of Scripbox.

Also read: PPF calculator: Here's how much you should invest in PPF to earn Rs 1 crore

SIPs help in averaging out the ups and downs of the market fluctuations.

Now, if somebody wants to earn Rs 1 crore in 10 years ( say their investment period is 10 years), he/she will have to invest Rs 33,000 monthly and the returns will come out to around Rs 1 crore (assuming the rate of interest is 10 percent).

Investors can also use Scripbox's SIP calculator to see the results by putting the tenure and total amount invested.

"This crorepati calculator calculates and proposes how much one needs to invest in order to achieve the goals. Users can also use it to calculate the worth of investment after a set number of monthly investments or even a single, initial investment, based on the interest accrued on the invested amount," suggests Mehta.

Click here to access Scripbox's SIP calculator.

The compound interest formula used in the power of compounding calculator is P , where P is the principal, I is the annual interest, and n is the number of periods.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

First Published:Jul 10, 2020 4:05 PM IST