In a step-up SIP (or top-up SIP) you raise your monthly SIP by a fixed percentage every year: start at ₹5,000, then ₹5,500 next year, then ₹6,050, and so on. Most mutual fund apps let you choose this when you start the SIP.
| Time | Regular SIP: invested | Regular SIP: fund | 10% step-up: invested | 10% step-up: fund |
|---|---|---|---|---|
| 10 years | ₹6,00,000 | ₹11,61,695 | ₹9,56,245 | ₹16,87,163 |
| 15 years | ₹9,00,000 | ₹25,22,880 | ₹19,06,349 | ₹43,41,925 |
| 20 years | ₹12,00,000 | ₹49,95,740 | ₹34,36,500 | ₹99,44,358 |
Where does the difference come from?
Over 20 years the step-up investor put in ₹22 lakh more, but the fund came out about ₹49 lakh bigger. The extra money also compounds for years.
How much step-up should you choose?
- Around your yearly salary increase, such as 5-10%.
- Start small; in a year without an increment you can pause or change the step-up in the app.
- Make sure your emergency fund and essential insurance are in place before stepping up.
Working: 12% expected annual return, monthly compounding, SIP raised 10% at the start of each year. Returns are not guaranteed.
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Frequently asked questions
Do I need a new form for a step-up SIP?
Many fund houses and apps let you add a top-up to an existing SIP; some need a new SIP. Check your app or fund house.
Can I stop the step-up midway?
Usually yes. You can change the step-up amount without stopping the SIP, or by starting a new one.