Step-Up SIP Calculator

Systematic Investment Plans (SIPs) allow you to invest a fixed amount regularly into a mutual fund that aligns with your financial situation, goals, and risk profile. A special type of SIP, called the step up SIP, offers a slightly different approach. With a step up SIP, you start as you would through a regular SIP – by investing a fixed amount.
But this contribution gradually increases every year, by an amount or percentage you are comfortable with. This is called the ‘step up’ percentage or ‘SIP top up’. Through this method, you can invest more as your income grows, so your investment strategy can keep up with inflation and your financial progress.

What is the Step up SIP calculator?

A step-up sip return calculator is an online tool you can use to estimate how much your investment will grow over time when you annually increase your SIP contributions. All you have to do is input some details such as your initial monthly contribution, the step up percentage, the investment duration, and the rate of return you expect the mutual fund to generate. The sip calculator with step-up will then quickly show a projection of the total corpus you can accumulate and even break it down into the total amount invested and total returns earned.
Money Per month(₹)
1000
Interest Rate(%)
1
Year(s)
1
1,20,000
Invested
1,20,000
Returns
1,20,000
Total
Created By: RUPAM BASAK

How Does the Step Up SIP Calculator Work?

A step up sip return calculator works by taking four inputs:

  • The initial monthly SIP amount This is the starting amount you want to invest each month. For example, if you start with Rs. 2,000, this is the initial monthly contribution. For the first 12 months, this is the amount you will contribute.
  • Growth in contribution per year (step up percentage or top-up) - This refers to the annual increase in your SIP contributions. You can specify a percentage increase (like 10% or 15%) or even a fixed amount to be added each year (like Rs. 1,000 or Rs. 5,000).
  • Investment tenure - The total period you plan to stay invested, in years.
  • Expected rate of return - Refers to the annual rate of return you expect from the mutual fund.

    An sip calculator with step up takes the growth percentage into account. This is different from a regular SIP calculator, which assumes your contributions will stay constant throughout the investment tenure. For example, if Ram decides to invest Rs. 5,000 per month for 5 years in a regular SIP, his total contribution amount would simply be Rs. 5,000 multiplied by 60 (the number of months in 5 years), which equals Rs. 3,00,000 over the investment tenure.

    However, if he decided to invest in a step up SIP with a 10% increase, his contributions would rise each year. Here’s how it works:

    Year 1 - Ram invests Rs. 5,000 per month, totalling Rs. 60,000 for the first year.

    Year 2 - With a 10% increase, his monthly contribution rises to Rs. 5,000 + 10% of Rs. 5,000 = Rs.5,500. Over the year, this amounts to Rs. 66,000.

    Year 3 - The 10% step up will apply to the previous year’s contribution amount rather than the original Rs. 5,000. So, Rs. 5,500 + 10% of Rs. 5,500 = Rs. 6,050. The total

    Year 4 - Similarly, the monthly contribution goes up to Rs. 6,655 (Rs. 6,050 + 10% of Rs. 6,050), Totaling Rs. 79,860 for the fourth year.

    Year 5 - Finally, his monthly contribution reaches Rs. 7,320.50, amounting to Rs. 87,846 for the last year.

    Over the course of 5 years the total of these annual amounts = Rs. 60,000 + Rs. 66,000 + Rs. 72,600 + Rs. 79,860 + Rs. 87,846 = Rs. 3,66,306.

Step Up SIP Calculator Formula

The step up SIP formula used to calculate the future value of an investment is: FV = P * [(1 + r/n)^(nt) – 1 / (r/n)] + (S * [(1 + r/n)^(nt) – 1 / (r/n)]).

Where,

  • FV = Future Value
  • P = Initial investment amount
  • S = Annual step up percentage
  • (r/n) = rate of return
  • (nt) = compounding frequency

The calculation using the formula can be quite complex and time-consuming, so it’s better to use these free tools to calculate step up sip value and get quick, accurate results.

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Benefits of Step Up SIP

Here’s how a step up sip can benefit investors:

  • It allows investors to slowly increase their contribution amount, which means one’s investment strategy can stay aligned with their income growth. This is particularly useful for salaried individuals as they tend to have a gradual increase in income over time, through annual raises, bonuses, or promotions.
  • Step up SIPs benefit from the power of compounding interest, which can help investors significantly grow their wealth over time. The longer you stay invested and the more you increase your contributions, the more powerful the compounding effect becomes.
  • Inflation can erase the purchasing power of money. With step up SIPs, you can make sure that your investments grow at a rate that outpaces inflation.
  • One of the key habits of financially successful people is maintaining discipline. With fixed monthly contributions and a commitment to increasing them annually, you can build a strong financial foundation over time which will allow you to achieve your long-term financial goals.
  • Investors can also enjoy other benefits that SIPs offer, such as rupee cost averaging, flexibility to change the contribution amount as their financial condition changes, professional management, and convenience.
  • Using a reliable calculator to calculate step up sip returns is beneficial as it gives accurate and quick results.

How to Use Fincart Step Up SIP Calculator

That’s all! The step up calculator will instantly display the total corpus value and also break it down into the total amount invested and total returns earned. 
  • Step 1 - Enter the initial amount you want to invest every month.
  • Step 2 - Select the step up percentage. This is the annual increase you want to apply to your SIP contributions.
  • Step 3 - Select how long you want to stay invested.
  • Step 4 - Finally, enter the expected rate of return.
  • Step 5 - Click Calculate.

FAQs - Mutual Fund SIP Calculator

The step up SIP calculator calculates the future value of your investment by taking into account your monthly contribution, expected rate of return, step up percentage (the annual percentage increase amount for your monthly SIP), and the investment tenure. It then displays the projected corpus you can accumulate by the end of the investment period.
Yes! Step up SIPs allow you to slowly increase your investments as your income increases. This means step up SIPs give you a chance to build a larger corpus compared to regular SIPs. For example, let us say you want to invest Rs. 10,000 every month for the next 10 years, and you expect your investment to return 12%. With a regular SIP, the total value of your investment after 10 years would be Rs. 23,23,391. Now imagine you decide that you’ll step up your monthly contribution amount by 10% every year. At the end of 10 years, you will have created a corpus of Rs. 33,74,326.
Yes! Fincart’s step up SIP calculator is completely free to use! Simply enter some details like monthly contribution amount, investment tenure, expected rate of return, and the annual step up percentage, and get instant and accurate estimates! You can use it as many times as you’d like to see how different scenarios impact your overall returns.

The minimum tenure for a step up SIP depends on the mutual fund scheme. For
example, in the case of Equity Linked Savings Schemes (ELSS), there is a lock-in
period of 3 years, which would be the minimum tenure.

The rate of return depends on the type of mutual fund you choose. For example, equity mutual funds offer high returns but also come with high risks. On the other hand, debt mutual funds like liquid funds are much safer, but they offer only modest returns.
In a regular SIP, your regular contribution amount stays constant throughout the tenure of the fund. Step up SIPs, however, allow you to increase your regular contribution amount annually or semi-annually. This increase can be either a step up percentage, such as a 10% annual increase, or a fixed amount, such as an increase of Rs. 1,000 each year.
The formula for calculating the future value of a step up SIP is: FV = P * [(1 + r/n)^(nt) – 1 / (r/n)] + (S * [(1 + r/n)^(nt) – 1 / (r/n)]).
  • FV = Future Value
  • P = Initial investment amount
  • S = Annual step up percentage
  • (r/n) = rate of return
  • (nt) = compounding frequency
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