How step-up SIP works
In a regular SIP, you invest the same amount every month for the entire tenure. In a step-up SIP, you increase your monthly contribution by a fixed percentage each year.
Year 2 (10% step-up): ₹11,000/month
Year 3: ₹12,100/month
... and so on
This strategy works because your income typically grows 8–15% annually, so increasing SIP by 10% keeps the investment affordable while dramatically boosting long-term wealth.
Step-up SIP vs regular SIP
| Factor | Regular SIP | Step-up SIP |
|---|---|---|
| Monthly amount | Fixed throughout | Increases yearly |
| Total invested (20yr, ₹10K start) | ₹24,00,000 | ₹68,73,000 (10% step-up) |
| Corpus at 12% (20yr) | ₹1,00,00,000 | ₹1,72,00,000+ |
| Effort | Set and forget | Annual review |
FAQ
What step-up percentage should I use?
Match it to your expected salary growth. If your income grows 10% annually, a 10% step-up keeps your SIP proportionate. Even 5% step-up makes a significant difference over 15+ years.
Can I do step-up SIP with any mutual fund?
Most fund houses and platforms (Groww, Zerodha, Kuvera, etc.) offer a step-up/top-up SIP option. You can set the increase amount or percentage and frequency when creating the SIP.
Is step-up SIP better than lumpsum investing?
Step-up SIP combines the benefits of rupee-cost averaging with increasing contributions. Lumpsum is better in a consistently rising market, but step-up SIP is more practical and less risky for most salaried investors.