Project a SIP's maturity value when you increase your monthly investment by a fixed percentage every year.
Like a regular SIP, but the monthly investment amount increases by a chosen percentage at the start of each year, compounding both the contribution growth and the investment returns.
Educational tool only — not investment advice. Markets involve risk; past performance and illustrative math don't guarantee future results.
A Step-Up SIP simply increases the monthly investment amount by a fixed percentage every year rather than holding it flat for the entire investment period — a ₹5,000/month SIP with a 10% annual step-up becomes ₹5,500/month in year two, ₹6,050/month in year three, and so on, compounding the contribution amount itself on top of the investment returns already compounding within the fund. The effect on the final corpus is substantial, not marginal: a flat ₹10,000/month SIP for 20 years at a 12% return lands around ₹1 crore, while the identical starting SIP with a 10% annual step-up reaches roughly ₹1.85 crore — nearly 85% more, from the same starting contribution and the same assumed return, purely from increasing the contribution amount over time.
The step-up amount is also specifically designed to track something real: most people's income rises 8-12% a year through raises and promotions, and a SIP that stays flat at its original amount quietly becomes a shrinking proportion of that growing income over time — meaning the investor is actually saving a smaller share of their earnings each year even though the SIP amount looks unchanged. A practical step-up rate in the 5-10% range keeps the contribution roughly aligned with typical income growth, and can meaningfully accelerate reaching a large long-term goal — in one illustrative case, a goal that would take roughly 24-25 years to reach with a flat SIP can be reached in about 17-18 years with a modest 5% annual step-up, since more money is being deployed, and deployed earlier, throughout the entire investment period.
A Step-Up SIP automatically increases the monthly investment amount by a fixed percentage every year, while a regular (flat) SIP keeps the same contribution amount for the entire investment period. A ₹5,000/month SIP with a 10% annual step-up becomes ₹5,500/month in year two, ₹6,050/month in year three, and so on.
A substantial one — a flat ₹10,000/month SIP for 20 years at 12% returns reaches roughly ₹1 crore, while the same SIP with a 10% annual step-up reaches approximately ₹1.85 crore, nearly 85% more, from an identical starting contribution and assumed return.
Because most people's income grows 8-12% annually through raises and promotions, and a fixed SIP amount becomes a progressively smaller share of that growing income over time. Stepping up the SIP by a similar percentage keeps your savings rate roughly aligned with your income growth, rather than quietly declining as a proportion of what you earn.
A commonly cited practical range is 5% to 10% annually, roughly tracking typical salary growth rates. Choosing a step-up rate that comfortably fits within expected income growth makes it more sustainable to maintain over the full investment period than an aggressive rate that strains the budget in leaner years.