- Investing Rs 200 daily for 12 years can accumulate Rs 20 lakh through compounding returns
- A 12% annual return on monthly compounding can achieve the target corpus in about 18 years
- Diversifying between Indian equity and US-focused funds helps manage risk and growth potential
Savings and safe investments are important for a secure future. It is often believed that a huge sum is needed to invest in order to earn significant interest. But to accumulate that sizeable corpus, people can consider investing small amounts for a long period of time, like a Systematic Investment Plan (SIP), as it doesn't burden individuals.
For example, Rs 200 per day for around 12 years can help in accumulating Rs 20,00,000, NDTV Profit reported, highlighting the healthy habit of daily savings.
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"Entirely Achievable"
"Building a Rs 20 lakh corpus by investing just Rs 200 a day is entirely achievable with the power of compounding," Dhairya Shah, Chief of Staff, INDmoney, told NDTV.
"While SIPs in mutual funds have long been the traditional route, investors can now also set up daily SIPs in Indian and even US stocks, a recent innovation that makes global investing truly effortless."
Shah explained that the right mix across these options depends on "one's risk appetite and time horizon, as the time to reach the goal may vary based on the chosen allocation".
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The Math Behind the Goal
Target: Rs 20,00,000
Daily investment: Rs 200 (which will be around Rs 6,000 per month)
Assumed annual return: 12% per annum (typical for a balanced equity-debt mix)
Compounding frequency: Monthly
Time Period: 12 years and 2 months
Invested Amount: Rs 8,90,600
Estimated Returns: Rs 11,31,055
Using a future-value calculator, a 12% annualised return compounds monthly turns the Rs 200-per-day habit into roughly Rs 20 lakh in about 18 years. Even a modest 10% return still reaches the goal in about 20 years, while a 15% return shortens the timeline to roughly 14 years.
Discipline and Diversity
"To build a Rs 20 lakh corpus by investing Rs 200 a day, start a disciplined SIP in diversified mutual funds that can deliver around 12% annual returns over approximately 12 years. This daily investment totals about Rs 6,000 a month and grows through compounding," Mayank Misra, Vice President, INDmoney, told NDTV.
"For better risk management and growth potential, diversify investments between Indian equity mutual funds and international funds focusing on US stocks. Indian funds tap into domestic sectors while US-focused funds provide global exposure and hedge against local volatility."
