A regular SIP stays flat for 20 years. A step-up SIP grows every year — usually matching your annual hike. The compounding difference is staggering.
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Because a flat SIP gets eaten alive by inflation and lifestyle creep. If you started a ₹10k SIP in 2010, that same ₹10k buys roughly half as much equity exposure today in real terms.
A step-up SIP fixes this. Each year, you bump the amount — usually 5-15%, matching your hike. The compounding on the back end is dramatic: at ₹10k/mo for 20 years, you end up with around ₹1 crore. Add a 10% yearly step-up and the same starting amount lands at roughly ₹3 crore.
Year by year, not by formula. Each month within a year, your current monthly SIP compounds at the assumed return rate (annuity-due — start of month). At the end of every 12 months, the monthly amount itself gets multiplied by (1 + step-up rate). The cycle repeats.
It's the same math any SIP does — just with a moving input. Which is why no clean closed-form formula fits on one line. The calculator runs the loop in JavaScript and shows you the result instantly.
Yes, but you have to be deliberate. Most AMC SIP mandates don't auto-step-up — they keep debiting the same amount until you tell them otherwise. The practical options:
1. Manually bump it every January — log into the AMC's site, modify the mandate.
2. Use a platform that does it for you — Kuvera, Coin, INDmoney, and most modern apps have a "step-up SIP" toggle.
3. Have Archita set it up — she'll register the mandate with the right step-up flag from day one. Drop her a line.