SIP of ₹40,000 per Month for 5 Years
Complete compounding breakdown for a Systematic Investment Plan (SIP) of ₹40,000 monthly over a 5-year investment horizon.
Returns Across Different Asset Classes
| Asset Class / Style | Expected CAGR | Total Invested | Estimated Returns | Maturity Corpus |
|---|---|---|---|---|
| Bank Recurring Deposit (RD) | 6.5% | ₹2,400,000 | +₹442,271 | ₹2,842,271 |
| Public Provident Fund (PPF) | 7.1% | ₹2,400,000 | +₹488,128 | ₹2,888,128 |
| Conservative Hybrid Funds | 8.0% | ₹2,400,000 | +₹558,668 | ₹2,958,668 |
| Large Cap / Nifty 50 Index | 10.0% | ₹2,400,000 | +₹723,295 | ₹3,123,295 |
| Diversified Equity (Flexi Cap / Multicap) | 12.0% | ₹2,400,000 | +₹899,455 | ₹3,299,455 |
| Mid Cap / Small Cap Funds | 15.0% | ₹2,400,000 | +₹1,187,268 | ₹3,587,268 |
Year-by-Year Wealth Accumulation Schedule (@ 12% CAGR)
| Timeline | Invested Principal | Growth / Gains | Total Corpus Value |
|---|---|---|---|
| Year 1 | ₹480,000 | +₹32,373 | ₹512,373 |
| Year 2 | ₹960,000 | +₹129,728 | ₹1,089,728 |
| Year 3 | ₹1,440,000 | +₹300,306 | ₹1,740,306 |
| Year 4 | ₹1,920,000 | +₹553,393 | ₹2,473,393 |
| Year 5 | ₹2,400,000 | +₹899,455 | ₹3,299,455 |
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Frequently Asked Questions
How much will ₹40,000 invested monthly in SIP become after 5 years?
At a standard historical equity index return of 12% CAGR, a monthly SIP of ₹40,000 for 5 years generates a maturity corpus of approximately ₹3,299,455 against an invested principal of ₹2,400,000, earning a wealth gain of ₹899,455.
What is the tax on the returns of ₹40,000 SIP after 5 years?
Under Section 112A (revised post-Budget 2024), Long Term Capital Gains (LTCG) from equity mutual funds held for more than 12 months are tax-exempt up to ₹1.25 Lakh per financial year. Profits exceeding ₹1.25 Lakh are taxed at flat 12.5%. For this scenario, estimated tax is ₹96,807, leaving a net post-tax maturity value of ₹3,202,648.
How does an equity SIP compare to a Bank Recurring Deposit (RD)?
In a Bank RD at 6.5% interest, your total corpus would be ₹2,842,271. An equity SIP at 12% delivers ₹3,299,455, generating ₹457,183 in extra wealth due to compounding power.
What will be the real purchasing power of the corpus after inflation?
Assuming an average inflation rate of 6% over 5 years, the purchasing power of your ₹3,299,455 maturity corpus will be equivalent to approximately ₹2,465,544 in today's money.
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