Flat SIP vs step-up SIP
A flat SIP of ₹10,000 for 15 years at 12% grows to about ₹50 lakh on ₹18 lakh invested. The same SIP with a 10% annual step-up invests far more over time (because later years contribute much larger amounts) and can reach ₹80–90 lakh. The step-up does most of its work in the final years, when both the contribution and the compounding are largest.
How the maturity value is built
Every monthly installment compounds independently: an amount P invested with m months left grows to P × (1 + i)^m, where i is the annual return divided by 12. The contribution stays the same for 12 months, then steps up on the anniversary. The maturity value is the sum across all installments. This tool computes it month by month, so it stays accurate for any step-up pattern.
Choosing a step-up rate
| Step-up | Effect |
|---|---|
| 0% | Ordinary SIP — savings rate falls as income rises |
| 5–8% | Roughly holds your savings rate constant with inflation |
| 10% | Tracks a typical Indian salary increment; corpus ~1.6–1.8× a flat SIP |
| 15%+ | Aggressive — needs sustained real income growth |
Practical notes
- Most AMCs and platforms support an automatic "SIP top-up" — set it once and it steps up on schedule.
- A fixed-amount step-up (₹1,000 more each year) is easier to budget than a percentage when the base is large.
- Review the step-up if your income growth stalls; you can pause it without stopping the SIP.
Questions
What is a step-up SIP?
A SIP that raises the monthly amount by a set % or ₹ figure once a year, usually to match salary growth.
How is it calculated?
Each installment compounds to maturity at the monthly rate; the amount steps up on each anniversary. Summed month by month here.
Is 10% realistic?
Yes — 5–10% roughly matches average Indian increments and keeps your savings rate steady.
Tax and fees?
Not included. The return is gross; expense ratio and 12.5% LTCG on equity gains over ₹1.25L/yr apply separately.