What is a step-up SIP?

A SIP whose monthly amount rises once a year, by a percentage or by a fixed amount. It is also called a top-up SIP.

Is 10% a year the right step-up?

There is no right number. People usually tie it to how their income grows. The calculator takes any percentage, including 0.

Does the increase compound?

Yes. Each year’s rise is on the previous year’s instalment, so ₹5,000 rising 10% a year is ₹5,500 in year 2, ₹6,050 in year 3 and ₹11,790 in year 10.

Can I step up by a fixed rupee amount instead?

Many fund houses offer both. This calculator uses a percentage. A fixed ₹500 a year on ₹5,000 matches 10% in the second year, then grows more slowly.

Why is the gain bigger than the extra money I put in?

The extra instalments also earn a return for as long as they stay invested, so the step-up SIP ends further ahead than the extra money alone.

Step-Up SIP Calculator: A SIP That Rises Every Year

Type the first month’s SIP, how much it should rise each year, an expected return and the years. See the total, and how far ahead of a flat SIP it ends.

How to use it

Type the SIP amount for the first year, for example ₹5,000 a month.
Type how much it should rise each year, as a percentage. With 10%, ₹5,000 becomes ₹5,500 in the second year and ₹6,050 in the third.
Type the return you want to test and the number of years.

The result shows the total you put in, the estimated gains and the final value, next to what a flat SIP of the first-year amount would give. The table lists the monthly SIP in every year, so you can see how large it gets.

What a step-up SIP is

A step-up SIP, also called a top-up SIP, raises the instalment once every 12 months. Fund houses offer it as an option when you register a SIP, as a percentage or as a fixed rupee amount. The idea is to match a rising income: if your pay goes up every year, the SIP goes up with it instead of staying at the amount you could afford when you started.

The arithmetic

The calculator works one month at a time. In year k, the monthly instalment is the first amount × (1 + step-up)^(k − 1). Each instalment goes in at the start of its month, and the whole balance grows by one month’s return, the yearly return ÷ 12. With a step-up of 0, the result is the same as the SIP calculator.

Worked example

₹5,000 a month, rising 10% a year, for 10 years, at a return of 12% a year if that held every year:

Year	Monthly SIP	Invested so far	Value at year end
1	₹5,000	₹60,000	₹64,047
2	₹5,500	₹1,26,000	₹1,42,621
5	₹7,321	₹3,66,306	₹4,92,285
10	₹11,790	₹9,56,245	₹16,87,163

In all, you put in ₹9,56,245 and end with ₹16,87,163. A flat SIP of ₹5,000 for the same 10 years ends at ₹11,61,695 from ₹6,00,000. So the step-up puts in ₹3,56,245 more and ends ₹5,25,468 ahead. The lead is bigger than the extra money because the extra instalments also earn a return while they stay invested.

The catch

A 10% rise every year compounds. By year 9 the monthly SIP is ₹10,718, more than twice the ₹5,000 you started with, and in year 10 it is ₹11,790. Check that the later amounts fit your budget before you pick a rate. Most fund houses let you change or stop the step-up, and you can always stop the SIP itself; the calculator simply assumes you kept going.

A rupee step-up instead of a percentage

Some fund houses let you raise the SIP by a fixed amount, such as ₹500 a year. On ₹5,000, ₹500 is the same as 10% in the second year, but after that a fixed ₹500 is a smaller and smaller share: in year 10 the SIP would be ₹9,500 a month, against ₹11,790 with a 10% rise. This calculator uses a percentage; for a rupee step-up, expect a result between the flat SIP and the percentage one.

What the calculator leaves out

The return is your assumption, and real returns change every year; no scheme guarantees one. Not included: the expense ratio (already inside a scheme’s published returns), exit loads, and tax when you sell. Units of equity-oriented schemes held more than 12 months pay 12.5% on long-term gains above ₹1.25 lakh a year, and 20% on gains within 12 months; units of debt funds bought on or after 1 April 2023 are taxed at your slab rate. Each instalment counts its own 12 months. Real instalment dates also differ from a calculator’s round months, which is why a fund statement shows XIRR.

Questions people ask

What is a step-up SIP?: A SIP whose monthly amount rises once a year, by a percentage or by a fixed amount. It is also called a top-up SIP.
Is 10% a year the right step-up?: There is no right number. People usually tie it to how their income grows. The calculator takes any percentage, including 0.
Does the increase compound?: Yes. Each year’s rise is on the previous year’s instalment, so ₹5,000 rising 10% a year is ₹5,500 in year 2, ₹6,050 in year 3 and ₹11,790 in year 10.
Can I step up by a fixed rupee amount instead?: Many fund houses offer both. This calculator uses a percentage. A fixed ₹500 a year on ₹5,000 matches 10% in the second year, then grows more slowly.
Why is the gain bigger than the extra money I put in?: The extra instalments also earn a return for as long as they stay invested, so the step-up SIP ends further ahead than the extra money alone.

Step-up SIP calculator