Worked example
Example with the default numbers — change them above.
Starting monthly SIP: ₹10,000 · Yearly step-up: 10% · Assumed return (a year): 12% · Investment period: 10 yrs
Your ₹10,000 monthly SIP, raised by 10% every year, becomes ₹32.69 L in 10 years at 12% a year, of which ₹13.56 L is returns.
| Value at the assumed return | ₹32.69 L · after 10 years |
|---|---|
| Amount invested | ₹19.12 L · ₹12 L with a flat SIP |
| Estimated returns | ₹13.56 L · 41% of the final value |
| SIP in your last year | ₹23,579 · up from ₹10,000 a month |
| Extra from stepping up | ₹10.29 L · a flat SIP would give ₹22.4 L |
| Worth in today's money | ₹18.25 L · after 6% yearly inflation |
How the Step-Up SIP Calculator works
- Enter your first-year monthly SIP, the percent by which you will raise it each year, the expected yearly return and the number of years.
- For the first twelve months the SIP stays the same. At the start of every later year it is multiplied by one plus the step-up.
- Each month the calculator adds that month's SIP and applies one month of growth to the whole balance. The yearly return is converted to a monthly rate so that twelve months compound to exactly your yearly figure.
- It runs the same plan with no step-up and compares the two, so you can see what the yearly increase adds.
- It also shows the SIP you will be paying in the final year and what the final value is worth in today's money.
Step-up SIP
SIP in year k = Starting SIP × (1 + s) ^ (k − 1)
Balance after each month = (previous balance + SIP of that month) × (1 + i)
s = yearly step-up as a decimal (10% is 0.10)
i = monthly rate = (1 + yearly return) ^ (1 ÷ 12) − 1Assumptions and limits
- The yearly return is converted to a monthly rate so that twelve months compound to exactly your yearly figure (12% a year is about 0.949% a month). Calculators that simply divide the yearly rate by 12 (1% a month) show higher numbers for the same inputs: about 4% more after 10 years, 15% more after 30 years and over 20% more after 40 years.
- The step-up happens once a year, at the start of each year, by the same percent every time.
- Each SIP instalment is invested at the start of the month, and the return is the same steady rate every month.
- Market returns are not fixed or guaranteed. Real investments rise and fall, so treat the result as an illustration at one steady rate, not a forecast.
- Enter returns after fund charges: a fund's published returns already have its expense ratio taken out. Exit loads and taxes on gains are not deducted, and they lower what you actually take home.
Frequently asked questions
How does a step-up SIP work?
A step-up SIP raises your monthly amount by a fixed percent at the start of every year. A ₹10,000 SIP stepped up by 10% a year for 10 years at 12% becomes about ₹32.7 lakh, against about ₹22.4 lakh for a flat SIP. You invest more in total, ₹19.1 lakh instead of ₹12 lakh, and your last-year SIP is about ₹23,600.
How much should I step up my SIP each year?
Many people match the step-up to their expected income growth, or to a figure they can sustain without stress, such as 5% to 10%. Even a small yearly increase builds noticeably more over a decade. Choose a rate you can keep up in a bad year, and try a few values in the calculator.
Is a step-up SIP better than a regular SIP?
A step-up SIP invests more in total, so it usually builds a larger corpus, but each rupee does not earn a better return. It suits people whose income rises and who want their savings to keep pace. A flat SIP suits a fixed budget. The comparison bars above show the difference for your numbers.
Does the step-up happen every month or every year?
Every year. The SIP stays the same for twelve months, then rises by your step-up percent at the start of the next year, and so on. Only the monthly amount changes; the number of instalments stays at twelve a year. The yearly schedule above lists the SIP for each year.
Why do other step-up SIP calculators show different results?
Calculators differ in how they convert the yearly return to a monthly rate and when they apply the step-up. This one makes twelve months compound to exactly your yearly return, so 12% a year is about 0.949% a month. Tools that use 1% a month show somewhat higher results for the same inputs.
Can I set up a step-up SIP with my mutual fund?
Many fund houses and investing platforms offer a top-up or step-up option on SIPs, letting you pick a fixed amount or percent each year. Availability and choices differ, so check with your fund house or platform. If yours does not, you can raise the SIP manually each year.
Sources
Logic and rates last verified on .
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See worked examples
The monthly SIP needed for goals from ₹10 lakh to ₹5 crore over 3 to 30 years.
- How much SIP is needed to reach ₹10 lakh in 3 years? — SIP ₹23,213 a month
- How much SIP is needed to reach ₹10 lakh in 5 years? — SIP ₹12,330 a month
- How much SIP is needed to reach ₹10 lakh in 7 years? — SIP ₹7,764 a month