A step-up (or top-up) SIP increases your monthly contribution by a fixed percentage each year. The compounding effect on the larger instalments is dramatic over time.
Illustrative only. The SIP increases once a year by the step-up rate; returns are compounded monthly. Not investment advice.
Your income usually rises each year, but most people keep their SIP flat. A step-up SIP links your investing to your earning. Even a 10% annual increase can add a large amount to your final corpus compared to a flat SIP, because the bigger later instalments still get years to compound.
The calculator runs month by month. Each month earns the monthly return; at the end of every year the contribution is increased by your step-up percentage. Invested amount is the sum of all instalments; returns are the corpus minus what you invested.
Set your step-up close to your expected annual salary hike. If you get a raise mid-year, you can always top up further. Compare the outcome with a flat SIP calculator run.
We'll set up a step-up SIP and review it every quarter.
ARTHUM