Money Basics · SIPs & mutual funds

Step-up SIPs

A regular SIP means ₹5,000/month forever. A step-up SIP means starting at ₹5,000/month and automatically increasing it by a fixed amount or percentage each year. The difference in final corpus is staggering.

How step-up works

You tell the AMC: start at ₹5,000/month, increase by 10% every year.

• Year 1: ₹5,000/month
• Year 2: ₹5,500/month
• Year 3: ₹6,050/month
• Year 10: ₹11,789/month

This mirrors reality. Salaries typically grow 8–12% annually. Your SIP should grow with your income.

The corpus difference

₹5,000/month for 20 years at 12% CAGR:

₹49.5 lakhflat ₹5,000/month

₹98.5 lakh10% step-up per year

> Same starting amount. Same market return. The only difference is the annual increase. The step-up nearly doubles the corpus.

How to set it up

Most MF platforms and AMC apps offer step-up as an option during SIP setup. You pick 'step-up' and set the annual increase percentage.

If your platform doesn't support automatic step-up, set a calendar reminder every January to manually increase your SIP amount.

The 50% of raise rule, automated

Link your step-up to your expected salary growth. Got a 15% hike? Increase your SIP by at least 7–8%. This ensures lifestyle inflation doesn't absorb every raise.

10% annual step-upnearly doubles your 20-year corpus vs flat SIP

Starting amount matters less than growing it consistently. A ₹2,000 SIP with 15% annual step-up beats a flat ₹5,000 SIP over 20 years.

Takeaway. A 10% annual step-up on your SIP can nearly double your 20-year corpus compared to a flat SIP. Set it up once and let it scale with your income automatically.