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When Rs 1 Crore FD Monthly Interest is used as SIP in Nifty [Case Study – 2025]

Dev Ashish

How about Using monthly interest from Rs 1 Crore FD as SIP in Mutual Funds?

That is, you use the FD monthly interest as SIP.

Can this be one ideal option for new investors who are looking to scale equity exposure slowly? Or rather very slowly?

Recently, I was talking to a friend. As it turns out, he is a pretty conservative saver. He doesn’t like equity. Or more specifically, he would love to have equity-like returns but fears the ups and downs of the market.

I tried to convince him about how one can start with a pure 100% debt portfolio and gradually scale up the equity investments.

How?

The idea is pretty simple.

Suppose you have Rs 1 crore to invest.

(I know Rs 1 crore is not a small amount. But stay with me and understand the concept. Then you can think whether it makes sense for anyone who is a conservative investor or not, even if it means starting with amounts less than Rs 1 crore – like Rs 10 lakh, Rs 25 lakh, Rs 50 lakh, etc.).

The idea is to gradually ease into equities. So what can be done is to park Rs 1 crore in a safe bank for fixed deposit. And then use monthly interest to invest via SIP into equities.

I know it sounds pretty simple. And it is.

But I am sure you would want to see how it works in practice. Right?

So let’s analyze a few scenarios with real numbers.

We still need to make a few assumptions:

So if you put Rs 1 crore in fixed deposit, you get Rs 50,000 monthly interest

Related Reading – Monthly interest on Rs 1 crore FD and Monthly interest on Rs 2 crore FD and Monthly interest on Rs 5 crore FD.

Now, this Rs 50,000 per month is used as the monthly SIP amount of Rs 50,000 to be invested in Nifty.

We will now see various scenarios where Rs 50,000 monthly SIP investment happens in Nifty starting from the year 2000, year 2001, year 2002… year 2007, year 2008… year 2014….year 2020 and finally year 2021.

Remember that we are constantly using the monthly interest for SIP, the FD principal of Rs 1 crore does not increase. And neither does it decrease as we are not withdrawing from the principal. We are only using the monthly interest. So with each passing month, the amount invested in equity increases.

Let me share one case study in detail and then I will share the summary of all findings:

And here is how the allocation distribution between equity and debt would have oscillated over the years:

That was about starting in the year 2000. But what if we started during the later years?

I simulated those scenarios for you. Here are the findings:

And that is how you can gradually scale up your equity investments over time without touching your FD principal of Rs 1 crore. Remember that this is an approach for someone who is really not into equity much. A person who is a very conservative saver (and not even an investor).

Ideally, a better approach would have been to start with some equity deployment initially and then handling it accordingly based on market views that you have and other factors.

Note – Debt funds are better than Fixed Deposits

But nevertheless, this was a depiction of how someone can be eased into equity investing if they are not much interested in it. And please don’t think that about retiring with just Rs 1 crore. Have no doubts. Rs 1 crore is not enough to retire in India. Though Rs 5 crore can be enough for most. Here’s the proof.

I hope you found this case study on how to use the monthly interest of Rs 1 Crore FD as SIP in Mutual Funds in India (2025) interesting. Do share it with your conservative and FD-lover friends and family members.

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