Learn · SIPs and compounding
Step-up SIPs: grow it with your salary
Raising your SIP a little every year, and what that does over time.
2 min read
Your salary grows. Your SIP can too.
A step-up SIP raises the monthly amount by a fixed percent or amount every year. If your pay goes up 10%, a SIP that goes up 10% keeps your saving rate steady.
Try it in the app
₹5,000 a month for 15 years
Pick how much the SIP goes up each year.
- Flat
- ₹23.8 lakh You'd put in ₹9 lakh.
- 5% a year
- ₹31 lakh You'd put in ₹12.9 lakh.
- 10% a year
- ₹41.4 lakh You'd put in ₹19.1 lakh. The habit does the work.
Illustration at an assumed 12% a year; real returns vary and can be negative.
Set it once
Many SIPs can be set up with a yearly step-up at the start. Otherwise, raise it yourself after every increment. Either way, choose an amount you can keep paying in a bad month.
Myth
I should step up as much as possible.
Fact
A SIP you stop is worth less than a smaller one you keep. Step up what's comfortable, and pause the step-up if money is tight.
10%
A common yearly step-up
Close to a typical increment. 5% is fine too.
Words from this lesson
- Step-up SIP: A SIP that rises by a fixed percent or amount each year.