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Next toolsAssumptions and methodology
Transparent calculation notes for Step-Up SIP Calculator.
Formula used
The monthly SIP rises once a year. Each instalment is invested at the start of its month and compounds monthly at the annual return ÷ 12 until the end of the tenure.
Methodology
- Invest the monthly SIP at the start of its month.
- Grow the balance every month at the annual return ÷ 12.
- Raise the SIP by the step-up percentage after every 12 instalments, and record the balance at the end of each year for the table and chart.
- Compare the final value with a flat SIP of the same starting amount, and show how much of the difference is extra money invested.
- Fund returns are usually quoted as CAGR or XIRR, so entering one here gives a slightly higher corpus (₹16,87,163 instead of ₹16,34,449 at the defaults).
Core assumptions
- Step-up happens once per year.
- Return remains constant.
- The investor can afford each future increased SIP amount.
Not included
- Income uncertainty, missed SIPs, taxes, expense ratio, and market volatility are excluded.
- Actual mutual fund returns are not guaranteed.
- Values are in future rupees and are not adjusted for inflation.
About Step-Up SIP Calculator
Guide1What is a Step-Up SIP?
A Step-Up SIP (also called a Top-Up SIP) is an enhanced version of a regular SIP where you increase your monthly investment amount by a fixed percentage or amount every year. As your income grows, your investments grow proportionally.
For example, if you start a SIP of ₹10,000 per month with a 10% annual step-up, your investment becomes ₹11,000 in the second year, ₹12,100 in the third year, and so on. This accelerates wealth creation significantly compared to a flat SIP.
2Step-Up SIP vs Regular SIP
- Higher Corpus: At 12% over 20 years, a 5% yearly step-up builds about 37% more than a flat SIP and a 10% step-up about 99% more, because you invest more every year (about 2.9× as much with a 10% step-up)
- Income Aligned: Matches your growing income with growing investments
- Same Starting Point: You begin with the same affordable amount
- Inflation Hedge: Increasing investments help maintain purchasing power of your future corpus
3Step-Up SIP Formula
The future value is computed month by month, with the monthly amount increasing each year:
Year N investment = M × (1 + s)^(N-1)
- M = Initial monthly SIP amount
- s = Annual step-up rate (e.g., 10% = 0.10)
Each instalment is invested at the start of its month and grows at the annual return ÷ 12 every month (12% becomes 1% a month). The total future value is the sum of every monthly instalment, each compounded monthly from the start of its month to the end of the tenure.
4How to Use This Step-Up SIP Calculator
- Step 1: Enter your starting monthly SIP amount (e.g., ₹5,000)
- Step 2: Set the annual step-up percentage (e.g., 10%)
- Step 3: Enter expected annual returns and investment duration
- Step 4: Compare the projected corpus with a regular SIP to see the additional wealth created