Mutual funds

What a ₹5,000 monthly SIP becomes in 20 years

Updated October 2026 · 5 min read

₹5,000 a month is where many people start their first SIP. Over 20 years you put in ₹12 lakh. What it grows into depends on two things you control, time and step-ups, and one you don't, market returns.

₹5,000 a month for 20 years at different returns

8% is closer to what a balanced or debt-heavy fund might deliver. 12% is a common long-term assumption for diversified equity funds in India. Neither is guaranteed.

Time does most of the work

At 12% a year, the same ₹5,000 SIP grows like this:

Going from 20 to 25 years adds only ₹3 lakh of your money, but the final value nearly doubles. Starting five years earlier is worth more than almost any fund choice.

The step-up effect

If you raise your SIP by 10% every year, in line with a typical salary hike, ₹5,000 becomes ₹5,500 in year two, ₹6,050 in year three and so on. Over 20 years at 12%:

• You invest about ₹34.4 lakh in total.
• The estimated value is about ₹99.4 lakh, close to ₹1 crore.

That is double what the flat ₹5,000 SIP reaches. Most fund houses let you set an automatic yearly top-up when you start the SIP.

Things to keep in mind

• Equity returns come in bursts. There will be years with negative returns, and stopping your SIP during those years hurts the most.
• Gains on equity funds held over a year are taxed at 12.5% above ₹1.25 lakh of gains a year.
• ₹50 lakh in 20 years will buy less than it does today. At 6% inflation it is worth about ₹15.6 lakh in today's money.