Finzony
Systematic Growth

Step Up SIP Calculator

Calculate potential growth by increasing your SIP contributions annually.

₹
%
Yrs
%
Total Value₹16,87,163
Invested Amount
₹9,56,245
Est. Returns
₹7,30,918

Step-Up SIP Explained

A Systematic Investment Plan (SIP) is a disciplined way to invest in mutual funds. A Step-Up SIP (or Top-Up SIP) takes this a step further by allowing you to increase your SIP amount periodically, usually annually. This strategy helps you account for rising income and inflation.

What is a Step-Up SIP?

The Step-Up SIP Calculator helps you visualize how small annual increases can lead to a significantly larger corpus over time compared to a regular SIP. It allows you to align your investments with your growing income.

How Does It Work?

The calculator accounts for four key variables: your initial investment, the duration, the expected return, and the annual step-up percentage.

The Logic:

SIP Amount (Year n) = P × (1 + Step-up %)(n-1)
  • Year 1: Standard SIP Calculation on Initial Amount
  • Year 2: Monthly Amount increases by Step-Up %. New SIP calculation adds to previous balance.
  • Repeat: This process repeats for the entire tenure.
  • Final Corpus = Sum of all compounded values

Calculation Example

Suppose you start an SIP of ₹5,000 with an annual step-up of 10%, for 5 years at 12% return.

  • Year 1: ₹5,000/month
  • Year 2: ₹5,500/month (10% increase)
  • Year 3: ₹6,050/month
  • Year 4: ₹6,655/month
  • Year 5: ₹7,320/month
  • Total Invested: ₹3,66,312
  • Maturity Value: ~₹4,92,290

How to Use Finzony’s Step-Up SIP Calculator?

  1. Enter SIP Amount: Input the initial amount you want to invest monthly.
  2. Set Duration: Choose how many years you plan to stay invested.
  3. Set Step-Up %: Enter the percentage by which you plan to increase your SIP every year (e.g., 10% to match salary hikes).
  4. Expected Return: Input the annual rate of return you expect from the mutual fund.

Benefits of Step-Up SIP

  • Beats Inflation: Automatically adjusts your savings to keep up with rising costs.
  • Matches Income Growth: As your salary increases, your savings rate increases proportionately.
  • Reach Goals Faster: A 10% annual step-up can almost double your corpus compared to a flat SIP over 20 years.
  • Power of Compounding: The extra amount invested in later years gets compounded, adding significantly to the final total.

Factors Influencing Earnings

  • Duration: Longer horizons allow the 'Step-Up' effect to compound massively.
  • Step-Up Rate: Even a small 5% annual increase makes a huge difference over 15-20 years.
  • Expense Ratio: Lower expense ratios in mutual funds mean higher net returns for you.
  • Market Performance: Actual returns depend on the market conditions of the underlying asset class.

Frequently Asked Questions

Can I stop the step-up facility later?

Yes, most AMCs allow you to modify or cancel the top-up facility while continuing the base SIP.

What is a good step-up percentage?

A common rule of thumb is to step up your SIP by the same percentage as your annual salary hike, typically 5% to 10%.

Is Step-Up SIP better than Lumpsum?

They serve different purposes. Step-Up SIP is best for salaried individuals to capture future income growth, while Lumpsum is for deploying existing idle capital.