Calculate your mutual fund returns with increasing SIP amounts every year.
A Step-Up SIP allows you to increase your monthly investment amount annually by a fixed percentage. For example, if you start with ₹5,000 monthly and choose a 10% annual step-up, your SIP will increase to ₹5,500 in the second year, ₹6,050 in the third year, and so on.
The ideal step-up percentage typically ranges from 5% to 15% annually, depending on your income growth expectations. Most financial advisors recommend a 10% annual step-up to match average salary increments and inflation.
Step-Up SIP can generate significantly higher wealth due to increased investment amounts over time. The power of compounding on larger investments in later years can result in 30-50% more wealth compared to regular fixed SIP amounts.
Yes, most mutual fund companies allow you to modify the step-up percentage annually. You can increase, decrease, or even skip the step-up for a particular year based on your financial situation and cash flow.
Step-Up SIP is ideal for investors with growing income, such as salaried professionals expecting regular increments. However, it may not be suitable for those with fixed or irregular income as the increasing commitment might become difficult to maintain.