Why step up your SIP?
Most people start a SIP with what they can spare today and never touch it again. But salaries in India typically rise every year, while the SIP stays frozen. A step-up (also called top-up) SIP fixes that by raising the instalment once a year, usually by 5–15%, so your investing keeps pace with your income.
The effect is bigger than it looks because the extra money is added every year and then compounds for the rest of the plan.
Worked example
How the calculation works
For each month: balance = (balance + SIP) × (1 + r/12)
Every 12 months: SIP = SIP × (1 + step-up %)There is no neat single formula for a step-up SIP, so the calculator simply runs the plan month by month. The table shows the SIP amount you would pay in each year, which helps you check whether the later instalments are realistic for your income.
Choosing a step-up rate
- 5%: a cautious choice that roughly keeps up with inflation.
- 10%: a common default that matches typical salary increments.
- 15% or more: works early in a career, when pay rises fast, but may become hard to sustain.
Most fund houses and apps let you set an automatic yearly top-up, either as a percentage or a fixed rupee amount. If yours doesn't, set a calendar reminder for the month your appraisal lands.
Frequently asked questions
Is a step-up SIP a different kind of mutual fund?
No. It's the same fund; only the instalment amount changes each year. Many platforms call it a top-up SIP.
Can I stop the step-up later?
Yes. You can pause the increase or reduce the SIP at any time without penalty, although some platforms need you to register a new mandate.
Percentage or fixed-amount step-up: which is better?
A percentage step-up grows faster over time because each raise is calculated on a larger base. A fixed ₹ amount is easier to budget for.
Does the calculator assume my return stays the same?
Yes. It uses one steady annual return for simplicity. Real returns vary, so try a lower rate to see a cautious outcome.