Best Way to Invest Twenty Thousand Rupees Per Month
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A peek into the various ways in which you can invest at least Rs. 20,000 every month and enjoy its returns in the future
They say that saving is a good habit. Indeed it is. After all, small drops can fill up an entire ocean. This means that every small drop counts. Apply the same example to your money, your earnings. Who says you need to earn lots to start saving? Just saving a small amount of what you earn or possess can indeed reap huge rewards one day.
For example, if your monthly income is roughly around Rs. 80,000 – Rs. 100,000, you can comfortably save a minimum of say 20,000 Rupees every month. However, is merely saving enough? To reap profitable returns on your savings, it is vital to invest this money.
This blog throws light at some of the key areas that you can consider for investing at least Rs. 20,000 monthly and how to double your money in the process. It also talks about the benefit of using a SIP calculator to accurately determine the likely returns on your investment.
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is a method of investing in mutual funds where you contribute a fixed amount at regular intervals, typically monthly. Instead of investing a lump sum, SIPs allow investors to spread their investments over time, reducing the impact of market fluctuations.
SIPs are particularly beneficial for individuals who want to invest in the stock market but lack the expertise to time their investments. By consistently investing a fixed sum, SIPs help in building wealth over time through rupee cost averaging and power of compounding.
How Does an SIP Work?
- You choose a mutual fund scheme and decide on a fixed monthly investment amount.
- Every month, this amount is automatically deducted from your bank account and invested in the selected mutual fund.
- The mutual fund allocates units to you based on the Net Asset Value (NAV) of the fund on the investment date.
- Over time, your investments grow through capital appreciation and reinvestment of gains.
- Since the market fluctuates, SIP ensures that you buy more units when the market is low and fewer units when it is high, reducing overall investment risk.
Invest Rs. 20,000 in Monthly SIP for 10 Years
One of the best ways to consider rupee investment is a Systematic Investment Plan or SIP as it’s popularly known. A lot of people who wish to invest an amount of Rs. 20,000 for the long term, say 10 years, prefer SIP. It can be said that it is undoubtedly the best SIP plan for 10 years.
SIP is highly recommended for small investors looking to invest smaller amounts like INR 20,000 to earn a good Return on Investment (RoI). It is also the best way to invest in the Mutual Funds market. Also, since the investment is made for a term of 10 years, it is important to stay consistent in your investment habits. The same amount of Rs. 20,000 should be invested unfailingly. The frequency of the SIP plan though can be decided upon by the investor. They can decide whether or not the investment is done monthly, quarterly, or annually.
How to Start an SIP?
Step 1: Choose the Right Mutual Fund
- Select between equity, debt, or hybrid mutual funds based on your risk tolerance.
- Equity mutual funds provide higher returns but come with higher risk.
Step 2: Select the SIP Amount and Duration
- Decide on your monthly SIP amount (Rs. 20,000 in this case).
- The longer you stay invested, the greater your returns due to compounding.
Step 3: Open an Investment Account
- Register with an Asset Management Company (AMC), mutual fund platform, or stock brokerage firm.
- Complete KYC (Know Your Customer) formalities.
Step 4: Automate Your SIP
- Link your bank account to set up auto-debits for SIP contributions.
- Stay invested consistently for long-term growth.
Benefits of Systematic Investment Plan (SIP)
1. Higher Returns
SIPs in equity mutual funds have historically provided an average return of 10-15% annually over the long term, outperforming traditional investment options.
2. Rupee Cost Averaging
SIPs help in averaging out market volatility. You buy more units when the market is low and fewer units when the market is high, reducing overall investment risk.
3. Power of Compounding
Reinvesting gains over time helps your investment grow exponentially. The longer you stay invested, the higher the wealth accumulation.
4. Flexibility
- You can start with as low as Rs. 500 per month and increase your investment as your income grows.
- SIPs allow you to pause, increase, or decrease contributions based on financial circumstances.
5. Diversification
Mutual funds invest in a variety of stocks across different sectors, reducing the risk associated with individual stock investments.
6. Tax Benefits
- ELSS (Equity Linked Savings Scheme) mutual funds under SIPs offer tax deductions under Section 80C.
- Long-term capital gains (LTCG) are tax-exempt up to Rs. 1 lakh per financial year.
What is the Average SIP Return on Rs. 20,000 Investment?
If you invest Rs. 20,000 monthly in SIPs, the potential returns vary based on different annual return rates. Here’s a breakdown:
| Duration (Years) | 10% Annual Returns | 12% Annual Returns | 15% Annual Returns |
| 5 | Rs. 15.48 Lakh | Rs. 16.76 Lakh | Rs. 18.57 Lakh |
| 10 | Rs. 41.12 Lakh | Rs. 46.78 Lakh | Rs. 56.12 Lakh |
| 15 | Rs. 98.46 Lakh | Rs. 1.18 Crore | Rs. 1.56 Crore |
| 20 | Rs. 2.21 Crore | Rs. 2.81 Crore | Rs. 3.94 Crore |
The longer you invest, the greater the power of compounding works in your favor. SIPs are a great way to systematically invest and grow wealth over time.
Example Investment Scenario for SIPs
If you invest Rs. 20,000 per month in an equity mutual fund SIP with an average annual return of 12%, your potential corpus after 10 years could be approximately Rs. 46.5 lakh.
| Investment Period | Monthly Investment | Expected Annual Return | Estimated Corpus |
| 5 Years | Rs. 20,000 | 12% | Rs. 17.4 Lakh |
| 10 Years | Rs. 20,000 | 12% | Rs. 46.5 Lakh |
| 15 Years | Rs. 20,000 | 12% | Rs. 1.05 Crore |
| 20 Years | Rs. 20,000 | 12% | Rs. 2.3 Crore |
Investment Options for Rs. 20,000 Per Month
1. Mutual Funds (SIP)
- Systematic Investment Plans (SIP) in mutual funds offer a disciplined way to invest.
- Equity mutual funds provide higher returns over the long term.
- Debt mutual funds are ideal for low-risk investors.
- Estimated return: 10%-15% per annum (Equity), 6%-8% per annum (Debt).
2. Public Provident Fund (PPF)
- PPF is a government-backed scheme with tax benefits.
- Lock-in period of 15 years, but partial withdrawal is allowed after the 6th year.
- Safe and secure investment option.
- Interest rate: 7.1% per annum (as of 2025).
3. Fixed Deposits (FDs)
- Suitable for conservative investors looking for stable returns.
- Banks and NBFCs offer different interest rates.
- Interest rate: 6%-7.5% per annum.
4. Recurring Deposits (RDs)
- Another safe option for saving and earning interest.
- Ideal for short- to medium-term financial goals.
- Interest rate: 5%-7% per annum.
5. Stocks (Direct Equity Investment)
- High-risk, high-return investment strategy.
- Requires market knowledge and regular monitoring.
- Average returns: 12%-20% per annum (long-term investment).
Important Investment Tips
- Diversify Investments: Spread your money across different asset classes to reduce risk.
- Start Early: The sooner you start, the better your compounding benefits.
- Regularly Monitor: Review and rebalance your investments periodically.
- Consider Tax Benefits: Opt for tax-saving investments like PPF, ELSS, and NPS.
- Emergency Fund: Keep 3-6 months' expenses in a savings or liquid fund before investing aggressively.
FAQs on Best Way to Invest 20,000 Rupees per Month in 2025
The 50-30-20 rule suggests that you should spend 50% of your earnings on your needs, 30% on wants, and put aside at least 20% as savings.
Investing Rs. 20,000 every month for 10 years means a total of Rs. 24 lakh invested. The return on this consistent investment is approx. Rs. 47-48 lakh, which is double the amount originally invested over 10 years.
The 10-5-3 rule states that it is wise to expect a 10% return on a long-term equity investment, a 5% return on debt instruments, and a 3% average return on savings bank accounts.
Author Bio
Paybima Team
Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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