Step-up SIP corpus projection.
Step-up SIP corpus
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Total invested
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Your breakdown
Updates live as you type| Stage | Monthly SIP that year | Notes |
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The idea behind a step-up SIP
A flat SIP fixes your contribution for life. A step-up SIP, sometimes called a top-up SIP, raises the monthly amount by a set percentage every year so your investing keeps pace with your salary. The logic is simple. Your pay does not stay flat for twenty years, so why should your SIP? Most fund houses let you register a step-up directly in the mandate, usually 5%, 10%, or a fixed rupee top-up, applied on the anniversary of the first instalment. This calculator follows that exact mechanic. You invest the starting amount through the first year, and the step-up kicks in from year two onward, compounding monthly at the return you enter.
How much a 10% step-up actually adds
The compounding gap is larger than people expect, and it widens with the step-up rate. Take the default inputs: a starting SIP of ₹10,000 a month, a 10% annual step-up, a 12% expected CAGR, over 20 years. The flat version of that SIP grows to about ₹98.93 lakh. The stepped-up version reaches roughly ₹1.97 crore, almost exactly double, on total contributions of ₹68.73 lakh. A gentler 5% to 6% step-up lands the uplift in the 50% to 80% range. So the headline depends entirely on the rate you choose. The point is that small, automatic raises to your SIP, the kind you barely feel after an appraisal, do most of the heavy lifting over a long horizon.
Worked example: ₹10,000 start, 10% step-up, 20 years
Here is how the first few years and the final result break down at a 12% CAGR. The monthly SIP rises each year, and the corpus pulls away from a flat SIP that stays at ₹10,000 throughout.
A practical way to set the rate
Do not over-engineer it. Pick a step-up rate slightly below your expected annual salary growth so the increase never pinches. If your CTC rises 12% to 15% on a good year, a 10% step-up still leaves room. One honest caveat: the calculator assumes a smooth CAGR, but real equity returns are lumpy, with flat years and sharp ones. The step-up mechanic does not protect you from a bad market, it simply ensures you are investing more rupees by the time the good years arrive. That is exactly when you want a larger base.
What you keep after tax
The corpus figure is pre-tax, so it is worth knowing how the eventual redemption is taxed. A step-up SIP into an equity fund builds units across hundreds of instalments, each with its own purchase date and cost. When you redeem, gains are computed instalment by instalment on a first-in-first-out basis. Units held more than twelve months are long-term, taxed at 12.5% on aggregate long-term gains above ₹1.25 lakh in a financial year, the rate in force after 23 July 2024. Units held under twelve months are short-term, taxed at 20%. Because a SIP keeps buying right up to the end, the most recent instalments may still be short-term when you exit, so phasing your withdrawals over a couple of years, rather than redeeming everything in one go, can keep more of the gain in the lower-taxed long-term bucket and let you use the ₹1.25 lakh exemption twice. None of this changes the contribution math, but it changes the rupees that actually reach your bank account.
Does a step-up SIP cost more in the early years?
Barely. In year one you invest the same as a flat SIP. The divergence is gradual, and because each raise is timed to your appraisal cycle, your savings rate stays roughly constant as a share of income. The corpus difference, by contrast, compounds hard at the end.
Can I change or pause the step-up later?
Yes. The step-up is a feature of the SIP mandate, not a lock-in. You can pause the SIP, reduce the step-up percentage, or cancel it through your fund platform. Equity fund units stay liquid, so nothing here ties up your money the way a PPF or NSC would.