Step Up SIP Calculator
Compound growth with annually increasing investments.
Maturity Value
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Invested
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Returns
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What is a Step Up SIP?
A Step Up SIP (also known as a Top-up SIP) is a strategy where you increase your SIP amount periodically, usually once a year. As your income grows, increasing your investment amount helps you reach your financial goals faster and combats inflation effectively.
For example, if you start with an SIP of ₹5,000 and decide to increase it by 10% every year, your SIP amount for the second year will be ₹5,500, for the third year ₹6,050, and so on. This small yearly increase can lead to a significantly larger corpus over a long period due to the power of compounding on the higher invested capital.
Benefits of Step Up SIP
- 1
Faster Goal Achievement: You can reach your financial targets sooner than with a regular fixed SIP.
- 2
Inflation Protection: Increasing your investment helps you stay ahead of rising costs and maintains the purchasing power of your wealth.
- 3
Matches Income Growth: It aligns your savings with your salary hikes or income increments.
Frequently Asked Questions
What is the difference between Normal SIP and Step Up SIP?
In a normal SIP, your investment amount stays constant throughout the tenure. In a Step Up SIP, you deliberately increase your investment amount by a fixed percentage or amount every year.
How much should I step up my SIP?
A common rule of thumb is to increase your SIP in proportion to your annual salary hike. A 10% annual step-up is a good starting point for most investors.
Can I stop stepping up my SIP later?
Yes, most mutual fund platforms allow you to modify or cancel the step-up instruction while continuing the existing SIP.
Does Step Up SIP guarantee higher returns?
Step Up SIP guarantees a higher invested capital compared to a fixed SIP, which naturally leads to a larger final corpus if the market performs well. It essentially forces you to save more.