What is the mutual funds 10-7-10 SIP rule?
Learn how SIP helps investors grow wealth through disciplined, periodic investments in mutual funds. A simple way to build financial securit
The “10-7-10” SIP rule is a simplified mutual fund investing strategy that suggests investing ₹10,000 per month for 10 years in a fund that delivers 12% annual returns, which can grow to ₹20+ lakhs—and if left untouched for another 10 years, it can compound to over ₹60 lakhs. It highlights the power of SIP + compounding + time.
📊 Breaking Down the 10-7-10 Rule
This rule is a wealth-building framework based on three key numbers:
🔟 Invest ₹10,000 per month
This is the suggested SIP amount. You can scale it up or down based on your income and goals.
7️⃣ Do it for 7–10 years
Stay invested consistently for at least 7–10 years. This allows your investments to benefit from market cycles, rupee cost averaging, and compounding.
🔟 Then let it grow for another 10 years
After the initial investment period, stop investing but don’t withdraw. Let the corpus grow untouched for another 10 years. This is where compounding accelerates.
💡 Example: How It Works
Let’s assume:
SIP: ₹10,000/month
Duration: 10 years
Expected return: 12% CAGR
After 10 years:
Invested: ₹12 lakhs
Corpus: ~₹23.2 lakhs
If left untouched for another 10 years (no new investment):
Final corpus: ~₹72.8 lakhs
That’s the power of compounding—your money works harder than you do in the second decade.
🎯 Why This Rule Works
Encourages long-term investing
Minimizes market timing stress
Maximizes compounding
Simplifies goal planning (e.g., retirement, education, home)
It’s especially useful for young professionals who can commit to a decade of disciplined investing and then let time do the rest.
⚠️ Things to Keep in Mind
The rule assumes 12% annual returns, which is typical for equity mutual funds but not guaranteed.
It works best with diversified equity funds or index funds.
You must stay invested and avoid panic-selling during market dips.
Use step-up SIPs to increase contributions as your income grows.
Final Thoughts
The 10-7-10 SIP rule is not a magic formula, but a powerful mindset shift. It shows how patience, consistency, and time can turn modest monthly investments into significant wealth. If you’re in your 20s or 30s, this strategy could be your ticket to financial independence.