SIPs: This mutual fund equivalent of bank recurring deposits can make you a crorepati – here’s how

SIP route to become a crorepati? Systematic Investment Plans (SIPs), often seen as the mutual fund equivalent of putting your money in recurring deposits offered by banks, are a great way for retail investors to invest in equity mutual fund schemes. To maximize the benefits of this investment method, investors can consider opting for a SIP top-up, which allows them to increase the SIP amount annually.
According to an ET report, a study conducted by WhiteOak Capital Mutual Fund reveals that a SIP top-up can significantly enhance the absolute returns from equity products.
WhiteOak Capital Mutual Fund says that a SIP top-up helps you extend that discipline to your expected higher future surplus money as well.
Financial planners emphasize that one of the most significant advantages of a SIP top-up is that it enables investors to achieve their financial goals more quickly.
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Mutual fund investors can choose between a fixed amount top-up, where they add a specific amount like Rs 100 or Rs 1,000 to their base SIP every year, or a variable amount top-up, which can be a percentage (e.g., 10% or 15%) of their original SIP amount.
For instance, an investor who invests Rs 10,000 per month in the BSE Sensex TRI (Total Returns Index) for 25 years would accumulate Rs 2.71 crore. However, by adding an annual top-up of Rs 1,000 to the monthly SIP of Rs 10,000, the investment would grow to Rs 4.26 crore.

Furthermore, an annual top-up of 10% on the same SIP of Rs 10,000 would result in a substantial sum of Rs 5.52 crore.
S Shankar, CFP at Credo Capital, told the financial daily that this method of topping up SIP can be particularly beneficial for young savers who have just started their careers and expect their salaries to increase over time.