Two Cases of Step Up SIP: Check How Much 5% Step and a 10% Step Would Make a Difference to Your Corpus

A Step Up SIP increases your monthly contribution every year by a fixed percentage. This simple discipline helps build wealth in line with income growth. Let us see two cases that start with the same monthly SIP of ₹5,000 but follow different annual step-ups.

What is a Step Up SIP

A Step Up SIP is a variation of the regular SIP where the monthly investment amount rises each year. For example, if you begin with ₹5,000 and step up by 5% annually, the contribution for the next year becomes ₹5,250. This systematic increase allows wealth to grow faster without adding sudden financial pressure.

Case One: 5% Step Up Every Year

In this case, Person A starts with a SIP of ₹5,000 per month and raises it by 5% each year. With a 12% annualised return, the investment grows as follows after 20 years:

• The total value of your investment after 20 Years will be - ₹ 68,69,251
• Invested Amount - ₹19,84,092
• Est. Returns - ₹48,85,159

This case shows that even a small increase every year boosts the final corpus significantly compared to a fixed SIP.

Case Two: 10% Step Up Every Year

Here, Person B also begins with ₹5,000 per month but increases the contribution by 10% annually. With the same 12% expected return, the results after 20 years are:

• The total value of your investment after 20 Years will be - ₹ 99,44,645
• Invested Amount - ₹34,36,632
• Est. Returns - ₹65,08,013

The higher step up leads to a much larger corpus, highlighting the combined effect of compounding and rising contributions. 

You can change inputs such as amount, step-up percentage, and more using this Step Up SIP Calculator to get the result. 

Read More: ITR Deadline Approaches: Last 8 days to file your ITR for FY 25!

Conclusion 

Both cases prove that increasing SIP contributions over time creates a substantial difference in wealth. A higher step-up percentage enhances the corpus even more, making disciplined increments a powerful tool for long-term wealth creation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.