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Mutual Funds: If you have ₹25 lakh and want to grow it to ₹2 crore, follow the strategy outlined here. It can help you become a 'crorepati' (millionaire) in a shorter timeframe.

Mutual Funds: Most mutual fund investors aim for their money to multiply significantly over the long term. If you have a lump sum of ₹25 lakh today, can it grow into ₹2 crore in the future? The answer depends on time and the rate of return. The power of compounding in mutual funds yields significant results over the long run. However, it is important to note that mutual fund returns are not guaranteed, and market fluctuations can impact your investment.

How many years will it take?

Let’s assume you invest a lump sum of ₹25 lakh in an equity mutual fund and earn an annual return of 12%. In this scenario, you could reach the ₹2 crore mark in 18 years. In other words, a long waiting period is required to grow ₹25 lakh to approximately eight times its original value.

How long will it take at different rates of return?

1. At an annual return of 10%, it could take approximately 22 years for ₹25 lakh to grow into ₹2 crore.

2. At an annual return of 12%, you could reach ₹2 crore in about 18 years.

3. At an annual return of 15%, ₹25 lakh could grow to around ₹2 crore in approximately 15 years.

How does compounding help grow your money?

Compounding is the greatest advantage of long-term mutual fund investing. It allows you to earn returns not only on your initial investment but also on the returns accumulated previously. While the growth of your money may appear slow in the initial years, as time passes, the returns earned on your accumulated returns cause your wealth to grow rapidly.